It's autumn in Paris and, as predictably as water flows down the Seine, the Marché aux Puces de Clignancourts is an exotic tangle of tourists, peddlers and pickpockets. Not for the first time, Sarah-Jane Clarke and Heidi Middleton are part of the flea market throng. The Australian designers, aka Sass & Bide, are searching for inspiration but, today, Heidi can't move past a stall selling antique baubles. Plunging her hand into a container of faded wooden beads, she slowly and deliberately picks out the colours of the rainbow.

That afternoon, at her rented apartment in the Marais district, Heidi threads the beads onto two lengths of blue string. One bracelet is for her, the other is for Kate Boyson, her friend half a world away in Sydney. "The colours represent life and friendship, hope and inspiration, and what I had with Kate," says Heidi. At the age of 32, just months after giving birth to her second daughter, Kate is battling cancer. And, that night in Paris, in an emotional tribute to her friend, a Sass & Bide collection is born.

Rainbows for Kate, which features, among other pieces, lightweight, full-length, rainbow-striped coats, was launched in February 2 at Mercedes-Benz Fashion Week in New York. A break from the designers' monochromatic palette, Heidi reveals, "It's the first time I've briefed a collection that is based on pure emotion. This is just about life and friendship and love."

Remarkably, Heidi, 36, Kate and their mutual friend Lucy May, 33, were all diagnosed with cancer within a month of each other early last year - Heidi's cancer was in the breast, Kate's the kidney and Lucy had non-Hodgkin's lymphoma. And, although Heidi and Kate hadn't met one another at that point, they knew of each other through Lucy and a complex maze of family connections.

Heidi learned that she had malignant breast cancer just hours after giving birth to her second daughter, Elke Bay, in February last year (Her other daughter, India, is two). She had a successful lumpectomy, followed by a course of chemotherapy. A week after her chemo finished in May - and before a less punishing course of radiotherapy began - Heidi found out Kate was in hospital after having a kidney removed, and was keen for a chat. "We had an instant connection on the phone," says Heidi. "I just loved the energy in her voice."

The next day, armed with a goose-down pillow, a selection of scarves and some candles, Heidi went to Sydney's St Vincent's Hospital. Kate had developed pleurisy - an inflammation of the membrane that surrounds the lungs - and was in considerable pain. "She was the most beautiful sick person I'd ever seen," smiles Heidi. "Although she was in a lot of pain, and very scared, she didn't look sick." Heidi also took a Sass & Bide t-shirt featuring the words "Walk With Me". "I said, 'I've got one of these, here's yours. I'm going to walk you through this until you're out the other side. This is not taking you'."

The new friends talked every day from then on, and caught up several times a week. "I just thought the whole time there's no way this girl can't make it," admits Heidi, biting her trembling lip. "Right through, she was hilarious. She was just very witty, very funny and vibrant, an amazing life force. I thought there's no possible way this girl is going anywhere, especially with Lucy and I making such good progress."

Two dog tags and two four-leaf clovers - one gold, one silver - hang on a web of chains around Heidi's neck. The clovers were a gift from Lucy, whose own orange-sized tumour has shrunk with chemotherapy. One of the clovers is Kate's. "We were the clover girls," states Heidi, smiling at the memory. "We wore our clover and talked to each other every day about the power of the clover and how we were all going to get through it."

Kate Boyson wasn't the first person to get back pain while moving house. But this was bad - and sudden. She and her husband of almost five years, Marcus, 35, an investment banker, had bought a holiday house on Sydney's northern beaches and, in April 2007, were finally able to move in. Five years previously, Kate, a former marketing executive, left her job to start a café in Bondi. Such were the brutal hours that Marcus would help out on weekends so the couple could spend time together. Kate sold the business before giving birth to her oldest daughter, who's now 3. That moving day, she told Marcus she didn't need anything more in life - she was content and happy.

Two hours later, she was in hospital. "Her whole kidney had cancer through it," says Heidi, adding that Kate had felt under the weather in the previous few months, but nothing severe enough to raise concerns. "And she'd just had a baby."

Doctors at Sydney's St Vincent's Hospital removed Kate's kidney and were confident the cancer hadn't spread. And three weeks later, when the surgery scar had healed, she would begin chemotherapy. But while she waited, the cancer spread. "It was then they realised it was a very, very, aggressive cancer," admits Heidi, adding that it was later likened to Ewing's sarcoma, a bone cancer that traditionally affects children and young adults.

Kate's doctor was direct: her prognosis was bleak. To Kate, this was insane. She had a husband she adored and two beautiful young girls to raise. She had heard of people being given three months to live and surviving 10 years. "She kept saying, 'Why not me?'" recalls Heidi. "The fight was on." Kate began chemotherapy and, for a while, her optimism appeared justified. Initial tests showed that the cancer had stopped in its tracks and subsequent results showed it actually retreating. "We were just so excited," remembers Heidi.

The designer felt safe going to Paris. She and Sarah-Jane had decided to take the design team there in September to get inspiration for their new, as yet unnamed, collection. For Heidi, it would be a celebration of her own recovery and "just an exciting thing to do" after an exceptionally tough year.

Kate was having a blood transfusion when Heidi visited to share the news. Marcus was there and the couple excitedly talked about their own plans for a holiday in November. "They just thought that it was going to be okay." Heidi was up-beat too. "I said to her that day, 'I'm only going [to Paris] because I know you're going to be alright. I'm only 24 hours away. I'd be on a plane in one second if things weren't ok'." Kate's next round of results was due in a week. Heidi vowed to leave her phone on, night and day. "I wanted to hear the good news," she concedes.

But Paris just felt wrong. Heidi was supposed to be in design mode, but instead found herself writing poetry and walking alone through the laneways of Marais. "I was wandering around one of the most beautiful cities in the world, but all I could think about was Kate and life and what it's all about."

When the news finally came, it was devastating: the cancer had spread once more. Heidi immediately booked a flight for herself, her children, and their nanny. "I felt sick being that far away." And, for the first time, it seemed the eternally sunny, feisty Kate had lost hope. In a call to Heidi from the hospital, "I think for 10 minutes she just cried," says Heidi. "I talked and she cried."

Heidi had two days to brief her design team on a direction for the range. "Normally, I'll have all these tear sheets out of places and references and different things. It's been this era or that era, it might be a Russian period or an architect or painter that I love," she says. "It's usually quite a tangible thing."

This time, it was a bracelet. On the night before she flew home, Heidi, Sarah-Jane and three other designers sat on the floor of the apartment with a glass of wine and discussed the brief. "Kate's illness really affected every woman we told," stresses Sarah-Jane. The design team was no exception. "We started talking about this rainbow theme," she adds. "Heidi said each colour on the bracelet represented a different emotion and that's when we decided that the bracelet was going to be a big inspiration for the collection."

Heidi's husband picked his family up from the airport and took Heidi straight to St Vincent's Hospital. True to form, Kate looked remarkably well. Her raven hair had fallen out, but her cheeks were pink. The women embraced and talked and decided to meet the following night, with Lucy, for a girls' night in.

It was Friday night, and, yes, it was a hospital, but the sadness that had filled the room was now replaced with candles and flowers and, across one whole wall, a poster with the words "Dance your Heart" surrounded by an enormous heart shape. The women ordered Chinese food and drank French champagne. Kate talked about her beautiful babies and falling in love with Marcus. She talked about how she felt leaving it all. "I feel invincible tonight," she declared.

Soon after, Kate went home. She got her baby christened, renewed her vows with Marcus and made two videos for her daughters - one for while they're young and another for when they turn 18, the day they'll also see the piece of jewellery their mum designed for their special birthday. Kate told her eldest daughter that Mummy was very sick and that not everyone gets better when they're sick. Heidi's voice fills with emotion. "How do you tell a little girl?"

Five days later Kate moved into a hospice - and Heidi moved into action. Determined to cheer up "a grey, depressing, room", she took in some Louis XIV-style chairs and some lamps. She covered the walls in tear sheets from magazines and curios she'd picked up at the Paris. "I told her she was the inspiration for this collection. This is going to be your show in February. You're woven into every piece of clothing."

Heidi asked Kate if, having endured this nightmare, there was anything she would like to do. "Double beds for couples in hospitals like this," was Kate's reply, "because all you want to do is lie next to your husband."

Heidi was running on adrenaline. "I just felt that she was sand slipping through the fingers," she describes. "You know when you're trying to catch something and there's nothing you can do? I just felt like grabbing her and stopping her from going." Although they'd never met, Heidi called Mark Keighery, founder of the Marcs label, who had miraculously survived his own near-terminal battle with cancer. He was in the US. "I just thought there's got to be something that we're not trying."

Sarah-Jane Clarke was starting to worry too - about Heidi. "I hoped she wasn't exhausting herself when she was trying to recover herself, but that's the type of person Heidi is," she insists. "Most people really take some time off and make sure they're well enough before getting back into life, but not Heidi. She's probably just one of those personalities that takes it all on."

Heidi said goodbye to her friend on the night of October 11. Kate's cheeks had finally lost their colour and "you could feel her spirit leaving," she says, almost in a whisper. "I felt like I could almost see the cancer and hear it in her chest. It felt like it was living. It felt so horrible." Kate worried most about Marcus. "They were so in love," stresses Heidi, her kohl-rimmed eyes filling with tears.

Hours after Heidi's visit, Kate went into a coma. She passed away two days later, surrounded by her family.

Heidi fingers the silver dog tags around her neck, a birthday gift from Marcus. Engraved on one of them is "Love Every Moment" and, on the other, "The Mad Ones", from the Jack Kerouac classic, On The Road. Marcus had called Kate after her first meeting with Heidi at the hospital. "What was Heidi like?" he asked. "Oh," said Kate, "she's mad!"

Heidi and Marcus have since become fast friends. But Marcus, she says, is doing it hard. "He was so in love with Kate. He said she was always the most amazing and interesting woman in any room and he said it didn't take her to go for him to realise that. He knew it every day he was with her."

Marcus is setting up a trust, also called Rainbows for Kate, aimed at raising money for research into his wife's rare form of cancer - and double beds for hospices. "For him," says Heidi, "to see people going on with their normal lives is hard because it's like 'Stop the world, my beautiful soul mate has just died'. Do you remember that beautiful poem in Four Weddings and a Funeral?"

The stars are not wanted now; put out every one
Pack up the moon and dismantle the sun;
Pour away the ocean and sweep up the wood;
For nothing now can ever come to any good.

For Heidi, Kate lives on in every thread of the colourful new collection. "We're loving wearing it and it feels right, and I wonder how much of that is connected to the whole energy," she surmises, adding that she feels Kate's spirit will always live on. "You still make mistakes and you still take things for granted, but the world looks different," says Heidi, whose own post-cancer prognosis is excellent. "I feel so lucky. In a way, it's almost like extra time in a football game. This is all a bonus now."

Marcus' trust, Rainbows for Kate, will be online soon at www.rainbowsforkate.com.au