I'm trying to locate a book that I read in the late 1980s, when I was somewhere in the range of ten to twelve. (It may have been intended for slightly older teens, since I recall it seeming quite dark to me at the time.) Three children (a mixture of British and American) meet on a resort island off the British coast. There, they are lured into a basement by a sort of goblin, who paints the walls all around them to look like a swamp, which then becomes real.
They find themselves in a fantasy world, where things can be painted into existence with a magic brush, and each of them has been brought there to help the corrupt king (and the even more evil forces that control him) keep various population groups under control. I don't remember that much about the later parts of the book, but I just remembered that it had a small number of line drawing illustrations.
I do recall that I was quite impressed with it, and I thought my kids might like it if I could find it again.