Terry Gilliam’s latest film is a triumph. That Dr Parnassus was finished at all following the death mid-shoot of its star Heath Ledger is impressive. That it hangs together as a striking work of fantasy is truly remarkable.

We are in familiar, fairytale Gilliam territory where imagination wars against dull reality, and innocence vies with evil, in a warped version of contemporary London.

The rackety travelling theatre of Dr P (Christopher Plummer) can transport people to their mind’s delight. But imagination takes energy, and many prefer the easy pleasures offered by devilish Mr Nick (Tom Waits). Worse, Dr P is to lose his own daughter Valentina (Lily Cole) to Mr Nick on her imminent 16th birthday after a failed wager.

When Dr P discovers Ledger’s mysterious Tony hanging, near dead and amnesiac, under Blackfriars Bridge, he enlists him as an ally. But is Tony hero or villain?

With odd synchronicity the three actors (Johnny Depp, Jude Law, Colin Farrell) who took over Ledger’s role for the fantasy sequences inside the Imaginarium, hint at darker sides to his personality. There are some dazzling visions here of giant stilt-walks and rivers that become rearing cobras, but the atmospheric scenes where Dr P’s caravan drags through derelict Battersea and menacing Clerkenwell work better.

Gallery: Dr Parnassus premiere

The rivalry between Parnassus and Mr Nick rambles on a bit, and the denouement involving Russian gangsters and children’s organs is awkward.

Perhaps understandably, this fantasy doesn’t have quite the coherence of Gilliam’s masterpiece Brazil. Plummer is a joy to watch, though, as a boozy and barely veiled directorial self-portrait. The sometime supermodel Cole, too, is surprisingly good, her weird prettiness and gamine sexuality recalling Uma Thurman’s debut in Gilliam’s Baron Munchausen. And Ledger?

His magnetic energy makes you rue again the loss of an actor it took three stars to replace. It also makes you glad Gilliam had the tenacity and (yes) imagination to complete his film.

The Imaginarium Of Dr Parnassus opens on Friday 16 October.