Tony Kaye's American History X is a film so fundamentally flawed that its shortcomings eventually point up its strengths. It's the story of Derek Vinyard (Edward Norton), the former hardman leader of a bunch of vicious, witless Nazi thugs on California's Venice Beach. He's just been paroled after three for the manslaughter of a young black who tried to heist his truck. And as Derek's teen brother Danny (Edward Furlong) knows only too well, there was nothing accidental about that particular death.

But inside Derek Vinyard had time to think - and outside is his time to act. He wants out, he wants to wave farewell to the life, to the sleazy local white supremacist organiser Cameron (a terrific Stacy Keach). And he wants to take Danny with him. By the end you just know someone around here will die.

The main reason to see this film are the searing performances Kaye elicits from his young leads. Furlong, destined forever for the B-list, is excellent as the bright, fundamentally decent Danny. He, you sense, is a kid just itching to walk away but is too wedded to respect for his wayward brother to go. And for his part Norton is even better - as either the manipulative thug or the penitent parolee he evinces nothing so much as the authority of a young De Niro. Whatever else the film does around him, he commands your attention from the get-go. His Oscar nomination was earned in sweat.

The film, too, looks stunning. Kaye is a self-promoting artist, grown rich on the back of some of the most distinctive and best known ads of recent years, so the dusky, washed-out palette of the present and the pin-sharp, artily posed monochrome flashbacks are beautifully etched. Indeed, the film is as handsome to look at as it is structurally hamstrung.

Because David McKenna's screenplay is a mess. Taken scene for scene, it's grittily realised, sharply observed stuff. But as it's assembled, American History X bypasses dramatic weight and stumbles over melodrama. The film seeks to explain Derek every step of the way - from nascent bigotry through reclamation - and drives a stake through its very heart in the process. Its reasoning is simplistic, betraying the weight of its playing. The climax should evoke poetry, but instead promotes a simple shrug of recognition; it comforts rather than moves us.

The result is a film that is far too polemical and, consequently, far less dangerous than the likes of Geoffrey Wright's queasy Romper Stomper, an Australian skinhead drama that still provokes howls of outrage wherever it goes. This is the better film, though, because when it's good - when Norton is blazing up the screen, when Kaye points his camera in the right direction - its flaws are overwhelmed by dazzling artistry and the all too necessary rightness of its message.