Damon Albarn has created a new musical version of the literary classic Alice In Wonderland, which will be staged this year.

He is working with playwright and screenwriter Moira Buffini, who will write the lyrics, and the director of the National Theatre Rufus Norris who will direct the production.

Blur and Gorillaz star Albarn has previously created stage works such as Monkey: Journey To The West and the opera Dr Dee, on which he also worked with Norris.

The new work, called wonder.land, is said to be inspired by Lewis Carroll's tale and revolved around a 12-year-old called Aly who flees unhappiness at home and bullying at school by escaping into a virtual world to become Alice. It will feature familiar character such as the Red Queen and the Cheshire Cat as well as Dum and Dee.

Albarn said: "I'm fascinated by the idea of going down a rabbit hole, the otherworldliness and what that might mean. Alice aside, the Queen of Hearts, the Duchess, White Rabbit, Caterpillar were the most threatening characters of my childhood. I was genuinely very frightened of them as a kid."

He said the idea was suggested by Alex Poots, artistic director of the Manchester International Festival which will stage the production first from July 2.

Poots said: "In Alice In Wonderland we have found something I have been looking for for some time: an inspiration that is both curiously and eccentrically English and yet has a universal currency."

Later in the year it will be staged at the National Theatre - which is co-producing the musical along with the festival - and next year will visit the Theatre du Chatelet in Paris.

Buffini, who has scripted films such as Tamara Drewe and Jane Eyre, said: ''I have never written a musical before so I am in at the deep end - but with two wonderful collaborators in Damon and Rufus. It has been a real pleasure so far and to my surprise I have enjoyed writing the lyrics most of all."

She said it had been a "fascinating journey" to reinvent the characters for a digital age.

The production was announced today as part of the National Theatre season for the opening year for Norris and new chief executive Tessa Ross.