Dance review: Hansel and Gretel - Something very nasty beneath the woodshed

Toy story: Gretel and Sandman in Liam Scarlett’s Grimm tale (Tristram Kenton)

The reason fairy stories have endured in the collective consciousness is not just that successive generations have been offered them as childhood fare. It's that they give a manageable shape and form to our deepest adult fears. So it should come as no surprise that Liam Scarlett, whose last ballet tackled the murky world of the painter Walter Sickert and his possible identity as Jack the Ripper, is now peering into the darkest corners of a Grimm Brothers' tale.

You wouldn't take a child anywhere near this treatment of Hansel and Gretel, any more than you would wilfully expose them to full details of what went on in that Cleveland basement. For not only has the choreographer transposed the action to a horribly believable trailer-trash setting in 1950s America, but the witch who imprisons the runaways seems to have stepped straight from the Bates Motel.

Casting adult performers as children is always a risk, but sunny-faced Ludovic Ondiviela and pigtailed Elizabeth Harrod avoid both cuteness and brattishness as the siblings whose stepmother (Kristen McNally, all beehive and cleavage) would rather they were dead, and whose alcoholic father (Johannes Stepanek) lives in his pyjamas.

Jon Bausor's radical design turns the entire Linbury Studio – which has always felt a bit like an underground cavern – into an open-plan film set, the audience on two sides. And while it's thrilling to be in proximity to such fine dancers, it's uncomfortable to witness familial dysfunction so close: there are times (the fights between father and stepmother, the children's distress) when you feel like a gawping neighbour, others when your face is scanned with a torch-beam as if you yourself might have committed a crime.

Dan Jones's soundtrack, brilliantly atmospheric, piles on the Hitchockian references: swelling Vertigo strings for Gretel's love for her father; the crunch of stilettos on gravel for the stepmother's approach; an ominous groaning as the focus descends (a real coup de théâtre) to the basement-prison, hidden beneath an innocent-seeming shed.

The cleverness of Scarlett's update lies in its psychological truth. He's certainly done his homework (even Stockholm Syndrome is there). He also finds neat inversions. Hansel's attachment to his teddy is mirrored and distorted in the paedophile's thing for toys; the children's cherishing of a photo of their late mother finds its rotten opposite in a corpse in the psycho's den (his own mother, we surmise). Grisly stuff, but the production mercifully stops short of suggesting the heinous acts themselves.

Another sharp insight is the addition of Sandman (Donald Thom), styled as a ventriloquist's dummy with a creepily floppy, sexually insinuating movement style. It's he who lures the children to their fate. Yet wasn't it the promise of the Sandman and his sack of dreams that once lulled generations of children to sleep? There is scant consolation here. Hansel and Gretel may escape the clutches of the basement weirdo, but they live with the nightmares ever after.

'Hansel and Gretel' returns to the Linbury in the autumn