Elusive and allusive, Lovers of The Arctic Circle is Julio Medem's best film. From its playful beginnings in a Madrid playground it quickly gains momentum as Olga and Alvaro set up home together, unaware that their offspring, as hesitant teenagers, have also become lovers. Great passions are at stake, but when Otto's abandoned mother dies under tragic circumstances, her distraught son disappears.

Writer-director Medem's sly, emotionally engaging tale is served-up to us not as any kind of conventional narrative (his three previous richly textured pictures hint that he's incapable of playing it straight), but in interlocking chapters, told in the alternating voices of the young lovers. It's a delightful conceit, emphasising their almost telepathic connection and underlining Medem's thesis that this is something more than infatuation. Coincidence and chance don't look quite so random when you are playing with seemingly cosmic forces.

The resulting picture has the scope of Vincent Ward's heady Map of The Human Heart, but with the intimacy of Krzysztof Kieslowski at his best. Like the late Pole, Medem is able to invest both objects and events with what we might call an ur-logic; a densely subconscious importance. Like Kieslowski, his film seemingly has gravity while exhibiting no apparent weight. It offers metaphysical sleight of hand, making even the occasional moments of broad comedy - some business with a parachute - or bed-hopping farce part of an extraordinary whole.

Which perhaps shouldn't come a total surprise: Medem's Tierra (with Almodovar's All About My Mother, the best Spanish film to reach the UK in the 90s) is more than tinged with symbolist spirit. But while that’s rather sour and more obviously magic realist, Lovers is both more accessible and simultaneously more freighted. Its circles, doubles, reversals and palindromes might suggest the game-mind of Peter Greenaway, but Medem has invested in real heart here - spot-on performances and a glorious Alberto Iglesias score should not be underestimated - shifting ground from the purely formalist and enlivening this masterly picture with as much passion as intellect.