You are at one of London's chicest boutique hotels, drink in hand. Everyone is wearing glamorous nightdresses and pyjamas. A tall dark stranger enters the room and asks you to curl up on cushions on the floor. No you haven't stumbled on an upmarket sex party, this is the Bedtime Story Night at the 40 Winks hotel — a restored 1717 townhouse in the East End.

“We invite everyone to dress up, there are drinks and nibbles with musical accompaniment and then two professional actors tell us fantastic stories,” says the owner, interior designer David Carter. “There are themed nights, such as Love and longing', Stories to make you dream' and Tales of Gothic horror'.”

At 40 Winks, guests also have the chance to share and exchange stories of their own. The idea, Carter says, is to emphasise storytelling as something that is natural and innate for all of us. “There's a lovely social dynamic. You are brought together with new people who share a love of dressing up, literature, story and performance.”

London is currently awash with storytelling nights. The Crick Crack Club hosts events at the Barbican and Soho Theatre, while the National Theatre has just put on its first adult storytelling event. Spark, Britain's first true-storytelling club, holds events on the first Monday of the month at the Canal Café Theatre in Little Venice, for ordinary Londoners to talk about their life experiences.

Cult New York storytelling salon Moth (which has become a US literary phenomenon, with 600,000 iTunes downloads a month) is coming to the Edinburgh Festival later this month.

Once a lost ancient craft, storytelling is now a cool art form to rival rap and poetry jams. “We didn't just want to do another burlesque night,” says Carter. “We wanted to engage people on a more intellectual level.”

Storytelling nights are inexpensive. You can put across a complex epic without a big cast, lighting or scenery, just through the power of the human voice. They also offer a unique experience. Often stories are never written down, so they change every time, subtly transformed by the audience — and the mood of the teller.

Actor Peter Searles is a professional storyteller. He has turned his love life into a one-man show (Sex with Pete Searles), as well as creating an award-winning trilogy of shows (Hey Gringo) based on his hair-raising travels in South America. “There's nothing to beat a funny story well-told. It's bare-bones theatre at its best,” he explains. “For years, storytelling was the less sexy cousin of stand-up. But it's definitely in the ascendant now.”

Searle also holds “out of your seat” workshops with corporate clients to teach communication, improvisation and body language. “It's a brilliant discipline to exercise all these performance skills. I'm also helping them tell their own stories too.”

Storytelling is behind all the commercial arts (from film to advertising). Former ad guru and film-maker Simon Aboud (aka Mr Mary McCartney) has just published a book titled Told (Booth Clibborn Editions) which defines the 20 great principles of storytelling — everything from archetypes to intrigue and suspense.

Contemporary storytelling fulfils a deep psychological need. We all remember being curled up under the covers as our mum or dad told us a gripping bedtime story. Even as an adult, being read to is a deeply intimate act — just think of Kate Winslet, naked in a bath, being read to by her young lover in The Reader.

Storytelling is particularly relevant for the Facebook generation, who tell shared “tales” about their lives through text and visuals. Cambridge-educated Rachel Rose Reid, voted Young Storyteller of the Year, is currently a hit at the Edinburgh Festival. She has MySpace and Twitter feeds, and has played the Latitude Festival with her one-woman show.

With a mix of folk tales and song, she offers her own take on epics from The Odyssey to the Icarus myth — but crunched down into bite-sized chunks for our short attention spans. While it might be having a hip moment, storytelling is the oldest oral art. When the only form of communication was by word of mouth, stories were the sole means of spreading news. Traditionally, tales were committed to memory and then passed from generation to generation. “There we were in the cave telling stories to stop being scared,” says Searles.

Even today, David Carter explains, storytelling taps into our ancestral roots, evoking a sense of reassurance, safety and community that we all crave. “Storytelling is the antithesis of tweedy literary events, which can be analytical and pretentious. There's a really lovely charm to it. It's a chance to be transported back to the innocence of childhood — and remember the dreams we had before we all had jobs and mortgages.”

The next Bedtime Story Nights at 40 Winks are on 7 and 28 October (020 7790 0259, www.40winks.org). £20, including drinks and nibbles.

The Spark Club is hosting stories of “foreign soil” on 7 September, 7.30pm, at the Canal Café Theatre, W2 (020 7289 6054, www.canalcafetheatre.com). £6 (£5 concs). For future events visit www.sparklondon.com.
www.petersearles.com.

Rachel Rose Reid is at the Edinburgh Festival until 25 August (0131 556 6557, www.rachelrosereid.com).