Stephen Sondheim's 1986 show is a real piece of work and it gets a fine outing in this vivacious, magical production at the Royal Opera House. A subversive pantomime, it begins by pulling apart the meanings of fairy tales then in its clever - sometimes clever-clever - way, moves on to pick over the comfortable certainties at their hearts.

In a Shrek-type fantasy world, four familiar heroes set out among the clocks, mirrors and shifting trees of designer Lez Brotherston's woods in search of dreams that frighten and entice them. As the cast relish every speechified rhythm of Sondheim's rhyme-packed songs and every bone-dry joke in James Lapine's self-mocking book, we begin to see the worldlier undertones of the famous stories.

Gillian Kirkpatrick's Cinderella plays games with her prince, unsure whether she wants to be caught. Suzanne Toase's Red Riding Hood is a little madam who charms us from the moment she introduces the insidiously childish and weirdly catchy title song. An innocent on the look-out, she allows us to take her "devouring" by the wolf as figuratively as we please. Clive Rowe's Baker and Anna Fran-colini's Baker's Wife grow in stature before our eyes, as their quest to find a child unlocks their hidden depths.

Musical standards are high. The tongue-twisting company numbers stand your hairs on end. Still, there's the occasional slip. Peter Caulfield is an endearing, dim-witted Jack, but can't nail his lovely ballad Giants In The Sky. The central Witch is a better part than Beverley Klein's rather hysterical performance makes of it.

There is also the problem of the second half, which, with the adventures of the long first half conventionally concluded, looks to their medium-term consequences. The wife of Jack's giant runs wild, Prince Charming is a seducer and Rapunzel has post traumatic disorders. Sondheim and Lapine reduce their world to chaos then ask us to hang around while they draw lessons from the confusion.

Despite more touching, intelligent singing from Rowe and Francolini, the show begins to feel dislocated and preachy. Perhaps it's easier to contemplate chasing your dreams, than what happens when you achieve them.

• Until June 30 (020 7304 4000, www.roh.org.uk).