Award-winning architect Jean Nouvel has finally built in Britain. He tells Jonathan Glancey why he created a 'sun machine' in a London park (complete with ping-pong tables)

Jean Nouvel stands before his first British building, a striking all-red structure set amid the sun-baked greenery of Kensington Gardens in London, and says: "You walk past the park. You look. You catch the red between the trees. What is it? Sails? A circus? Something. You don't know what, so you have to look."

The French architect is talking about the summer pavilion he has created for the Serpentine Gallery, which was unveiled yesterday. What inspired this rhapsody in red? "It was that moment," he says, "when the summer sun catches you full in the eyes and, as you blink, the world dissolves into red."

Nouvel's pavilion – the 10th to grace this park – isn't just red on the outside, though. Beneath its commanding red steel frame and retractable red canvas awnings, there's a red rubber floor, around which are dotted red table tennis tables, red hammocks, red tables and chairs, and red chess sets. Even the auditorium and cafe bar are red (as are its fridges). And, just in case you had any difficulty spotting the pavilion from a distance, off to the side there is a 12-metre red glass wall, sprouting up from the grass like a great big punctuation mark.

This "big sunglass", as Nouvel calls it, leans over at an unsettling angle, appearing to threaten the pavilion, adding a sense of drama, even danger, to his eye-catching creation. "In one way," says Nouvel, "the pavilion is a sun machine, a way of directing sunlight. In another, it is a fragile flower that rises in the park in the summer sun, wilts in the autumn, and then vanishes. Of course, red is also the colour of London in some ways – the buses, the pillar boxes, the soldiers for the Queen – but mostly red is about the sun."

But Nouvel, who follows in the footsteps of previous Serpentine architects Oscar Niemeyer, Zaha Hadid, Toyo Ito and Rem Koolhaas, wants the pavilion to do more than just catch the sun. "I want it to catch and filter emotions, to be a little place of warmth and delight. For an architect, it's always a pleasure to work with a programme that has no great consequences – the pavilion comes, the pavilion goes. It leaves an impression, echoes of emotion, nothing more. In this way, the architect is free to be the artist. This is not a perfect exercise in architecture. It's a building from a dream that allows us to have some little, I hope happy, sensations. It's architecture on holiday."

Nouvel's pavilion is a simple yet striking construction that, on closer inspection, proves to be far more than a brightly coloured sculpture. Some of its red surfaces absorb light, others reflect it; some glimmer, others are translucent. Beneath its retractable roofs hang photographs of another grand park in a great capital city: Paris's Jardin du Luxembourg – but that's a formal park, like most of France's, unlike the more relaxed and playful English ones. These shots are by Jean Baudrillard, the celebrated French philosopher who died three years ago; he was a big influence on Nouvel, as well as a friend. Through this pavilion, architect and philosopher walk together again in a vibrant green space.

The structure has clearly been shaped, with a little help from Arup engineers led by David Glover and Cecil Balmond, as a plaything. Yes, there will be serious talks and various events in the auditorium. But before people go along to these, they can meet and chat in the red bar – or play red table-tennis, or kick a red football or hurl a red Frisbee out into the park. So, what's with all this playfulness?

Well, the Serpentine pavilion is traditionally designed by an architect who has yet to build, or complete, a building in Britain. The 2010 pavilion, however, is only just ahead of the game: this autumn sees the opening of  Nouvel's One New Change, a controversial shopping and office complex to the east of St Paul's Cathedral. This is serious architecture, about as playful as a nuclear reactor. Nouvel himself has described the building as a "stealth bomber": although enormous, it is clad in non-reflective (or opaque) glass, as if to disguise its bulk. Prince Charles tried to scupper Nouvel's chances here, but failed to get his own preferred architects appointed. The pavilion, in toying with architecture, provides a bit of balance against what is to come.

It seems a shame that Nouvel's first major permanent work in Britain is a commercial behemoth. His strength lies in the design of art galleries, concert halls and museums. The energetic 64-year- old's best works are the Institut du Monde Arabe, a mesmerising cultural foundation by the Seine in Paris, completed in 1987; 1994's Fondation Cartier, a quietly beautiful Parisian arts centre that reveals itself through layers of huge glass screens; and last year's Copenhagen Concert Hall, a mesh cube lit up at night to dazzling effect. Each of these finely wrought and enigmatic buildings was expressed in one overriding colour: silver, white, blue.

"Architecture is a dialogue," says Nouvel. "When it's complete, I hope you will see some of the ways we've incorporated games into One New Change. There will be a terrace with new views of the City and St Paul's – and it won't have that transparent glass look you get with 99% of city buildings, which makes everywhere seem nowhere." Is it possible to take ideas from art galleries and pavilions and use them in big commercial buildings? "If it's desirable, then it's possible. Architects have to offer a window into the future, even when the window won't open."

Nouvel's best commercial designs have been the soaring, 38-storey Torre Agbar in Barcelona, a Catalan cousin of Norman Foster's Gherkin (completed in the same year the Gherkin opened, 2004, but with a mosaic effect rather than a diamond one); his (sadly unbuilt) Tour Sans Fins proposal, an ethereal, pencil-thin 1,300ft skyscraper that would have vanished into the skies above Paris's La Défense office complex; and the Hotel in Lucerne, opened a decade ago and showing again Nouvel's obsession with immersing users of his buildings in intense colour, this time black.

I once stayed at the Hotel: it was like being Jean Nouvel for a few days, such was the insight it gave into his style, which began to feel like a philosophy. My suite – pitch black at one end, pure white at the other, where it opened into an unexpected bamboo garden – was reached along a jet-black corridor that rendered day and night indistinguishable. The topsy-turvy atmosphere was heightened by a concealed projector throwing a scene from Buñuel's That Obscure Object of Desire across the bedroom ceiling. The same scene played over and over and I couldn't turn it off. It was dreamlike, unforgettable and, to be honest, somewhat maddening.

Nouvel is very good when working with art, artists and imaginative concepts. Both of his major arts projects are now in the Middle East: the Louvre Abu Dhabi and the National Museum of Qatar. Both are caravanserai-like attempts to find a design that responds to the desert landscape, and both are set above water gardens. "These seem to be early days for European architects working in the Middle East," he says. "We have to do better than we have before. We must find ways of helping to shape a true Arabian architecture, not just put ready-made, inappropriate designs down in the desert."

Nouvel is an architect with plenty of jokers up the sleeves of his trademark jet-black suits. But his ideas can be as romantic as they are philosophical: the Tour Sans Fins proposals showed how even the most matter-of-fact building type (in this case the office block) could be a work of poetic imagination, finesse and structural daring. As the sun beats down on his scarlet pavilion, it is hard not to think of Nouvel as an optimist, too, one with a very unFrench view of the British weather. He has certainly been lucky to unveil his "sun machine" in the middle of a heatwave. He could so easily have found himself explaining its inspiration from beneath a rain-battered red umbrella, as the world dissolved into grey.

The Serpentine Gallery Pavilion is open to the public from 10 July until 17 October.