Unto the seventeenth century city of Macon a baby is born, the product of, much to the consternation of the church and delight of its people, a virgin birth. The citizens gather around to be blessed by the miraculous child, unaware of the dark secret masked by the virtuous young girl - that the child is actually that of her grotesque simpleton of a mother. Thus the stage is set for conflict between the miraculous and the rational, as personified by the bishop's son.

That is, a stage is literally set, for this is a play, mounted in Macon cathedral for the delight of the effete Prince Cosimo, with designs to restore the blighted land. But gradually the boundaries of theatre and reality begin to blur and the audience are absorbed into events with cruel and unusual results. The virgin (Julia Osmond) seduces the bishop's son (Ralph Fiennes) into being Joseph to her Mary, only to see him gored to death by an ox on the direction of the holy child; she suffocates the boy before the altar and at the direction of the bishop is systematically raped to death by 208 militia men, and her parents executed; finally, the body of the child is carved up to provide religious relics for the hungry audience.

There can be no more self-possessed film-maker than Britain's Peter Greenaway, a purposeful stylist with a fascination for the baroque and extreme, and an unerring eye for detail. His singularity of vision is fascinating, allied to a bullheadedness that all too often alienates large sections of the potential audience (reference: the culinary atrocities of The Cook, The Thief, His Wife And Her Lover). And even among his admirers at Cannes, The Baby Of Macon was vilified as empty, ugly, and - most bizarrely - stylistically barren. In the latter case it is hard to consider any film designed by the Dutchmen Ben van Os and Jan Roelfs (the Greenaway back catalogue, Sally Potter's Orlando) as anything less than opulent and sumptuous, and this film no more or less than any other.

One must look elsewhere therefore for the reasons for such attacks, and will more likely than not find them within the director's baldly stated atheism, which automatically posts this rendition of the Nativity on a whole other axis, with an unmasked assault on Catholic iconography, and the acceptance of superstition over reason. Greenaway himself explains: "The subject and strategy...are of equal parts - exploitation. Exploitation of a child as subject, exploitation of cinema as strategy." In the former case, Greenaway claims inspiration from a Benetton ad, and through that reads the way in which children have been manipulated and manoeuvred for adult purpose throughout the ages - from Bethlehem to modern advertising. In that, this film is uniquely successful, in the way the holy child is administered for the most part as little more than a living idol, or, as in the final moments, some kind of gruesome souvenir.

Similarly, Greenaway is largely successful in his other aims: to question the relationship of audience and performer: "Who should be surprised when they invade the stage and grapple for relics? They are no longer an audience, they have become the actors. It is so with us, seduced by or intrigued, repulsed or disturbed by all these cracked-up excesses of cinematic conventions." At the climax, the bodies of the virgin, the bishop's son and the ox (slaughtered by the virgin) are brought stage-front, and the camera pans back to reveal audience upon audience, leading, with inexorable logic, to the cinematic audience itself. This extends to the form Greenaway elects for the entire piece - extended slow-tracking shots, dragging the attentions of the viewer, barely allowing breathing space - the traumatic and disturbing rape sequence in particular, where the virgin is informed that no longer is this play-acting, and Greenaway launches a gruelling eleven minute shot that contrasts the terrors of the girl with the cold formalism of the spectators recording the precise number of her tormentors (a flashback to the numerological concerns of his Drowning By Numbers).

Fortunately, this film avoids the static tableaux feel of his last, Prospero's Books, or his recent TV work, Darwin, both with the restlessness of his camera, and the spirited performances put up by Osmond (impressive shifts from manipulator to victim) and Fiennes, in a more limited role. Elsewhere, it has to be admitted, folk like Don Henderson (in a near mute role) are largely set-dressing, although Philip Stone's bishop and Jonathan Lacy's Cosimo Medici put up vigorous, noteworthy showings. Less sure is a soundtrack that blends a variety of sources but lacks either the procedural or alluring choreographies of his former in-house composer Michael Nyman. (The pair disagreed over the use of the latter's score for Prospero's Books).

Comparisons have been sought for this piece, and more than one reviewer has hit upon Pasolini's commentary on the fascistic mind, Salo, as a worthy benchmark. What they share in common is a "grim neutrality" that drags the viewer into its black heart, with no hope of redemption or escape, but The Baby Of Macon, for all its repetitive formalism and misanthropic coldness, is nowhere near the gruelling exercise in degradation and ritual that film rehearses to sickening effect.

The Baby Of Macon is arguably too much for its audience - too harsh, too ornate, too vicious - and it is tempting to suggest that the appalling reception that greeted it is tempered not so much by a much vaunted fear for Peter Greenaway's talents, as for the way in which it admirably assaults the church and all its works in such a typically forthright, unrepentant manner. Certainly it lacks the warm self-mocking and humour of his best work - Drowning By Numbers, The Cook, The Thief... - but then nor is it as forbidding and remote as his adaptation of The Tempest or his arch, smug debut The Draughtsman's Contract, and in the end can only be judged by individuals as to its merits - or otherwise. For that at least it remains a film that demands to be seen.