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The Soviet writer Vasily Grossman finished his major novel, Life and Fate, in 1960, four years before his death from stomach cancer. It could have made him as famous as Solzhenitsyn in the west, but it wasn't published anywhere until the 1980s, and until fairly recently he was little known in the English-speaking world.

Born into a secular Jewish family in Ukraine in 1905, Grossman became a published writer in the 30s and volunteered for the army after the German invasion of 1941, in which his mother was murdered. Given a job as a journalist instead, he became one of the USSR's top war correspondents, covering the siege of Stalingrad and the battle of Kursk, publishing one of the first accounts of the Nazi death camps and accompanying the Red Army all the way to Berlin. He also helped to gather material documenting the massacres of Russian and Polish Jews, but this project was suppressed by the Soviet authorities.

Partly in response to the antisemitism of the late Stalin years, Grossman became a dissident in the 50s. For a Just Cause (1952), a war novel, was orthodox enough, but its sequel, Life and Fate, was deemed explosive. "Why," the party's chief ideologue asked after Grossman submitted it for publication, "should we add your book to the atomic bombs that our enemies are preparing to launch against us?" A conscious attempt to write the War and Peace of the second world war, Life and Fate focused heavily on Stalinist as well as Nazi atrocities, suggesting similarities between the two in a way that made it unpublishable in the USSR for – Grossman was told – 200 years. The manuscript was "arrested" by the KGB, and the writer felt he'd been "strangled in a dark corner". But he was even more outspoken in Everything Flows, perhaps because there was no question of publishing it officially.

This unfinished last novel tells the story of Ivan Grigoryevich, a man released from the gulag after 30 years into a Russia enjoying a brief thaw after Stalin's death. The story's dramatic skeleton is only partly fleshed out – Ivan's finding a job and somewhere to live is blocked in with one quick paragraph, for example – and in effect the book is an assemblage of scenes, speeches, stories and, increasingly, essays on the gulag experience, the Stalinist horrors of the 30s and the moral consequences of the state's partial admission of guilt under Khrushchev. Few of the people Ivan meets have clear consciences, and in some moods they resent the state for "confessing": why can't it continue to shoulder the burden of everyone's bad faith? At the same time, the novel suggests that even the worst informer shouldn't be blamed too quickly, and traces a kind of genealogy of various types of opportunist and fanatic.

The book's opening section, in which Ivan visits his cousin, a mediocre scientist who has prospered thanks to the purges of "cosmopolitans", is the most fully realised. Other stand-out sections include a first-person account of the man-made Ukrainian famine of 1932-3, and an effective, compressed account of the gulags, which Grossman pieced together from oral testimony. The essays on Lenin and Stalin have inevitably lost some incendiary power, though the announcement that the deep Russian soul worshipped by Gogol and Dostoevsky was, like the dictators, "simply the result of a thousand years of slavery", still impresses with its courage. And he writes acutely about the ease with which the Russian intelligentsia could delude itself. Surely the show-trial victims were guilty of something: after all, the chief prosecutor had a university degree.

Everything Flows has been translated into English before, as Forever Flowing (1972), by Thomas P Whitney. Robert Chandler, whose version of Life and Fate made Grossman's reputation in English, has denounced Whitney's translation – on Amazon.com: what is it with these Russianists? – as clumsy, error-filled and "based on an incomplete manuscript".

To a non-specialist, Whitney's version, though freer, doesn't seem hugely different. But Chandler and his co-translators plainly use less guesswork. Where Whitney dampens one moment of savage irony with the semi-incomprehensible "cultural toys", the new translation has "educational toys". It also supplies a wealth of information about the historical context and Soviet terminology. Whitney has one character wearing "a Moscow suit size fifty-eight". Chandler and co give him "a size 58 suit from the Moscow Tailoring Combine", explaining in an endnote that "clothes produced by this factory were notoriously ugly" and quoting the poet Osip Mandelstam on the subject.

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