Once upon a time, the land of dreams bestowed a wonderful honour on the hideous ogre Shrek, awarding him a specially created Best Animated Feature Oscar for his success in slaying the box office. Shrek 2 ought to be in the running for the main Best Picture Oscar, as it's by some distance the best film of the year so far.

The film begins where the last one left off, with Shrek and Princess Fiona on honeymoon. They return to their first marriage crisis, as Fiona wants Shrek to meet her parents, and Shrek is reluctant, certain that they will reject him. He's right, of course, as the King and Queen wanted Fiona to marry Prince Charming, and are horrified to find that not only has their beautiful daughter married a disgusting green ogre, but also become one herself.

Shrek 2 shares the first film's delight in subverting fairytale conventions, with Prince Charming recast as a weak-willed mummy's boy, the Fairy Godmother a vain tyrant, and the famous ogre slayer Puss In Boots a cute little kitten. As a result the plot is consistently surprising, and rattles along at a thrilling pace.

This pace is maintained by cramming every scene with a wide range of gags and pastiches, even rivalling The Simpsons in this respect, which is as high a compliment as I can imagine for this type of material. This bombardment of references, which I won't spoil by revealing, is one reason for the film's record takings, as audiences flock back to catch the jokes they missed.

The original cast are all back and on fine form, although Eddie Murphy's Donkey is almost upstaged by Antonio Banderas as the hilarious Puss In Boots. The English are well represented too, with new parts for John Cleese, Jennifer Saunders, Rupert Everett, and Julie Andrews (does she still count as English?). In one of the film's many innovations, there are minor voice parts for local celebrities, so Kate Thornton plays the red carpet reporter voiced by Joan Rivers in the US version, and Jonathan Ross replaces chatshow host Larry King.

Best of all is the animation, which is not only gorgeous to look at, but clearly surpasses Disney Pixar on a technical level. Dreamworks invented new tools for this film, including 'bounce shader', which mimics the way light bounces around different surfaces, and 'subsurface scattering', which replicates the way skin radiates light. There are other tricks too, with the end result that a number of scenes look 'real', as much as a fairytale world can look real.

Shrek 2 is a stunning achievement; a hilarious, thrilling comedy that sets new standards for CGI animation, with a hip, modern agenda that makes Finding Nemo look very old-fashioned indeed.

David Haviland, 17.06.04