One of the spectacular discoveries of the Cassini spacecraft was the plume of water vapour and icy particles (dust) originating near the south pole of Saturn's moon Enceladus. The data imply considerably smaller velocities for the grains than for the vapour, which has been difficult to understand. The gas and dust are too dilute in the plume to interact, so the difference must arise below the surface. Here we report a model for grain condensation and growth in channels of variable width. We show that repeated wall collisions of grains, with re-acceleration by the gas, induce an effective friction, offering a natural explanation for the reduced grain velocity. We derive particle speed and size distributions that reproduce the observed and inferred properties of the dust plume. The gas seems to form near the triple point of water; gas densities corresponding to sublimation from ice at temperatures less than 260 K are generally too low to support the measured particle fluxes. This in turn suggests liquid water below Enceladus' south pole.