Dick Whittington, New Wimbledon Theatre

You know what to expect from an audience with Dame Edna Everage. The London-loving Merry Widow of Moonie Ponds can be trusted to hurl her gladdies, patronise the paups in the cheap seats, dish out tough love to a lesser suburban housewife and lead a paean to her "niceness". But this is not a panto which simply grovels at the feet of her colonial highness.

I felt as well worked-out at the end as if I’d sat through a very satisfying Wagner Ring cycle. Should I be surprised? My experience of great panto is limited, it's true: probably the last was in this very Wimbledon theatre, when as a cub scout I joined the gang backstage to get Jimmy Tarbuck’s autograph (this, of course, is a shaming rather than a nostalgic memory). But it was never as much fun as this. Oh, the prettiness of those painted flats, picture-book quaint for olde London and beglittered in more magical locations! Oh, the 3D underwater animation (indebted to Finding Nemo, but none the worse for that - and about as long as a 3D sequence should be)! Oh, the costumes! Dame Edna gets her own rouched or sequinned gowns courtesy of Stephen Adnitt, but Terry Parsons, who does the rest and the sets, is as much pure panto genius as director, author and performer Eric Potts, whose Sarah the Cook (just glimpsed on the right of Dame Edna below) Parsons graces with a stupendous wardrobe, from fondant fancy to a touch of Little Britain's Bubbles on a tropical island. Admittedly much of this seems to come from an earlier Potts-inspired Dick Whittington in Bristol, but who's complaining if you've not seen it before?

The audience is already game for a traditional laugh before the curtain rises, and gets it right at the start from Richard Calkin's rhyming-coupleted King Rat and a happy introduction to a wealth of panto types long before Dame Edna flies in above the audience on Womble Airlines.

Usually you'd be waiting for the supposed star; here you split your sides or groan at the pointedly various gags of Kev Orkian's tireless, spontaneous-seeming Idle Jack, the routine of Ben Goffe's Captain Titchworth, a small personage with huge song-and-dance abilities, and the expected cheesiness of juve love and schmaltzy songs parcelled out between Sam Attwater's Dick Whittington and Anna Williamson's Alice Fitzwarren (the songs and well-choreographed dances are way too over-miked to hear the words, my only criticism. No mistaking, though, one outrageous segue from the Village People's "In the Navy" to "On the Good Ship Lollipop"). Leap to near the end of the show, and Dame Edna, corpsing the rest of the cast, salutes a new Lord Mayor "famed for his courage, perhaps less for his singing and acting abilities". But truth to tell, Attwater is as good at what he has to do as anyone.

Our Melbourne visitor is happier being a wrily scornful observer of these bizarre English rituals than playing by the rules as influential "Fairy Edna, Saviour of London". She prides herself on introducing the word "genre" into the occasion as she wanders around Highgate Hill prevaricating with her magical powers, and tells us "this is the thinking possum's panto". She mocks the wretched verse she has to speak in character, cooked up by a Romanian with a grant from the EU ("not for much longer" - hope it's the Dame rather than her creator who speaks there). She has a fun sequence with a frozen cast at the start of Act II, but there it's the other comics who truly steal the show.

Orkian (pictured left with Terry the belching turtle) rattles off a dazzling precis of the action so far before joining Potts and Goffe in a "12 Days of Christmas" - just about the only strictly seasonal reference - which involves endless hilarity with a pack of five toilet rolls hurled around the audience (and don't ask why my programme's soggy): pure Marx Brothers anarchy. Almost as good is the Act I scene in Sarah's kitchen: who'd have thought that a cookery session with a sausage that refuses to lie down under pastry could be such fun for all ages, and at all levels? And our Idle Jack encapsulates the measure of the show's fine balance between mockery and kindness in genuinely hilarious badinage with three kids from the audience (better not spoil the joke here, either).

As I stumbled exhausted from three hours of unqualified mirth, a small boy was pointing at Dame Edna's poster and remonstrating with his mother: "There's no way that's a man." I suggest he take the matter up with Dame Edna's manager, Mr Barry Humphries, who last appeared on the Wimbledon stage in 1960 as Mr "That's your funeral" Sowerberry in Oliver! (I have the LP, though I hasten to add that even though I subsequently saw Tarby In Wimbledon, I wasn't born then). Once again, the panto tradition which surrounds Dame Edna with warmth and not too much tough love has been going even longer. Amazing to see it so alive, well and professionally realised as it is here. You won't see a better.

• Dick Whittington is at the New Wimbledon Theatre until 15 January, 2012