Graffiti with bells on

If you dread Christmas shopping, and find the high-street stores uninspiring, head for Santa's Ghetto instead. Banksy, the notorious street artist, is offering a seasonal selection of cutting-edge art at knockdown prices, says Charlotte Cripps

Christmas is officially upon us. If you don't believe me, take a walk down Oxford Street in central London: the fairy lights are flashing in the dusk; the window displays dazzle; carols are piped relentlessly into an atmosphere that's thick with the aroma of posh perfumes and cinnamon-scented candles. Right now, the retail world is at full-tilt: the shop doors - and the cash registers - are wide open and waiting to suck us all in.

But if you rail against the commercialisation of Christmas, while getting to grips with a present-list that's longer than your scarf, you may be interested to know about a very different shopping experience just a short stagger away from this bedlam.

Santa's Ghetto is a temporary shop set up in abandoned premises just off Carnaby Street, described as a "festive extravaganza of cheap art and related novelty goods from lowbrow artists and trained vandals". (So, not exactly Debenhams, then.) It opens to the public tomorrow, but tonight, its launch party will attract a select guest-list of cool Londoners, including Damon Albarn and Alex James of Blur, Radio 1 presenter Sara Cox and her club DJ husband Jon Carter, and the star chef Jamie Oliver.

Why are they so interested? Mainly, because this shop is the latest platform for the genius of Banksy, the red-hot graffiti artist and outlaw notorious for painting on London's pavements, street hoardings and traffic signs. He goes to great lengths to remain anonymous (often wearing a monkey mask to avoid identification if he has to appear in public) but has, inevitably, become a cult hero of the trendy art "establishment" that he regularly castigates.

The disused shop, which Banksy "blagged" from the landlords from now up until Christmas Eve, will have the boards pulled away from its windows and a kitsch nativity scene set up outside. There has, apparently, been some difficulty sourcing a live donkey.

The organisers of Santa's Ghetto, picturesonwalls.com (a new website that sells Banksy's paintings and prints, alongside work by other "underground" artists including Jamie Hewlett, Mode 2, Massive Attack's 3D and Faile), are fuelling a cheap-art revolution, launched online in September. The objective is to sell art at affordable prices, putting it within reach of everyone, not just wealthy investors and dealers. The art works on sale here start at £40 for silk-screen prints.

"The Ghetto is partly a shameless commercial enterprise, and partly about promoting art. But basically it is a piss-take on Christmas," says Banksy, who designed the cover for Blur's latest album, Think Tank." It's also a great place to buy presents," he adds, pragmatically.

Naturally, the brains behind this enterprise are not taking themselves too seriously. Alongside Banksy, Hewlett and Mode 2 - one of the best-known graffiti artists to come out of the 1980s aerosol-paint craze - is Steve Lazarides, the director of picturesonwalls.com and art director of Sleazenation magazine. He is also director of the online PYMCA (Photographic Youth Music and Culture Archive). But the beauty of this temporary shop is that it brings Banksy, his fellow-artists and their work to a swathe of punters who might never have heard of them otherwise.

It is typical of Banksy (whose real name is Robert Banks and who hails from the West Country), that he aims to undermine the "stuffy" art world with this project. Original art works are going on sale from £500 to £1,000. "What happens here," says the graffiti guru, "is far more interesting than making money." This comment might be seen as disingenuous, given the price tags involved. Not many of us will spend upwards of £500 on a single Christmas present, after all.

So what can we expect to find in this parallel universe of Christmas shopping? Unlike most other West End stores, which had their Christmas windows and stock planned and sorted before most of us recovered from last New Year's hangover, Santa's Ghetto has a more relaxed approach. Banksy himself doesn't even seem to know exactly what he'll be selling, apart from his silk-screen prints. "There will be some stencils, though I'm not sure what of, yet - street signs, car clamps, anything I've collected recently and painted on."

Banksy's most recent work marries the twin Christmas themes of retailing and religion. It is a painting on MDF of Christ on the cross, his outstretched arms laden with bags of shopping. It's a challenging image - "an offensive dripping acrylic," says the artist - which will be on sale in the shop. It's not to everyone's taste, of course, and that is exactly why Bob Geldof has expressed an interest in borrowing it for a project in which controversial images are to be projected on to the side of Tower Bridge. There are two more paintings on a religious theme, featuring the Virgin Mary. "It is interesting how religious figures in art wear hooded tops that make them look like glue-sniffing teenagers," he says.

Most prices in Santa's Ghetto are reasonable. A Banksy print entitled Happy Choppers, depicting an Apache helicopter trimmed with a pink ribbon tied in a huge bow, is priced at £44.99. Jamie Hewlett, known for his punk pin-up cartoon Tank Girl and Damon Albarn's animated band Gorillaz, is selling prints with titles such as Big Sponge Finger at £54.99. Another Hewlett print, M16 Assault Lolly (£54.99), is described as "a mouth-watering nine-colour screenprint highlighting the violence and brutality of the iced-confectionery industry".

"When we decided to open the shop, we had reached a point where the art world seemed to us largely uninspiring," says Hewlett. Art gets sold for extortionate amounts that normal people cannot afford, and that seems wrong. Why has art got to be so expensive? We know how long it takes to make. We wanted to undermine the existing art community and show that you can do it cheaply. Young people don't have huge bank balances. We hope that students can decorate their flats with our work.

"There will be an unlimited number of prints," continues Hewlett, who is, as we speak, customising a batch of Puma trainers that the sportswear company donated to the artists for sale in the shop. He is scribbling "Nike" on them with a felt-tip pen. Yours for £22 a pair.

Other goods on sale include T-shirts, hoodies, bags and stickers. There's also Banksy's new book Cut It Out (£4.99), a follow-on from his previous pocket books, Banging Your Head Against A Brick Wall and Existencillism. Both can be found in the bookshop at Tate Britain, whose staff recently had to remove a Banksy oil painting that was sneaked in and glued to a wall in the gallery. "People often ask whether graffiti is art," said Banksy, in response to the stunt. "Well, it must be, now - it's hanging in the Tate!"

Today's most pressing concern for Banksy, however, is that as yet, no one knows quite how the shop is going to work. "We can't have some punter coming in on the first day and buying up the whole shop in one go. (Are you listening, Charles Saatchi?) "There'll have to be some kind of consumer control. We'll see what happens."

Banksy is rare among graffiti artists in that he actually makes money from his creations. But the fact that he is now in a position to sell his work for large sums is proving difficult, he admits. "Both sides kick up," he says. "Whether it's the Daily Mail or fellow-graffiti vandals. Either way, there is a lot of jealousy when you are seen to be making money. They don't like to see anybody winning." He adds: "I'm sure the shops nearby will hate us, too. Everything will be really cheap. We'll be there for the busiest shopping period of the year, then we'll disappear. Let's face it, I'm never going to open a shop again. It is just a bit of a craic."

Banksy's latest sculpture, The Dunce, a two-tonne bronze replica of Rodin's The Thinker with a traffic cone on its head, stands at the intersection of Westbourne Terrace and Harrow Road, near Paddington, as a monument to "mindless vandalism". It was placed there by the artist himself, under cover of night, a concept inspired by Tesco's "Bogof" (buy one get one free) scheme. Every time Banksy sells a sculpture, London gets one for free.

It is true that Banksy, having decided to become a commercial artist, could sell his works for a lot more than he does at present, and thus have the financial success of an artist such as Damien Hirst. "But he's keeping his feet on the ground. I respect him for that," says Hewlett.

Banksy is unfazed by the prospect of stocking the West End shop until Christmas Eve. This may be because he typically spends 35 seconds on each work of art. "People only look at art for a few seconds, so what's the point of spending more time on it?" he says.

Santa's Ghetto is at Kingly Court, London W1, from tomorrow to 24 December, 12noon-9pm