Stewart Lee, Leicester Square Theatre

Stewart Lee is pretending to be mildly crap. He keeps discussing how he is none too funny, but the point is that his commentary on his own shortcomings thereby turns into a droll running gag. He achieves this with deadpan relish. His delivery is, of course, characteristically sardonic, albeit with an amused glint in the eye. He also frequently stops to spell out how the mechanics of his routine are supposed to be working: po-faced mini-lectures on the art of being hilarious.

In Vegetable Stew (no fancy set, just a mic stand and a stool), he appears to be making excuses at the outset, stating that it’s a work in progress, not up to scratch yet. He's just trying out material that he hopes to use in his next BBC Two series of Stewart Lee's Comedy Vehicle (due for broadcast in March 2011). This partially lets him off the hook, gives him some leeway. However, this is a distinctly smart bloke: an intellectually upmarket stand-up, palpably priding himself on that. So the game he's playing is more sophisticated than just allowing himself some slack patches. For sure, when he flags up his rudimentary shortlist of topics for the night, it sounds a ludicrously half-baked or semi-stewed hotchpotch: 1) charity; 2) Adrian Chiles; 3) the Government.

He is really slating the stupidities and moral hypocrisies of contemporary society

Lee is, moreover, soon digressing. One minute, he's telling us why he does benefit gigs and helps blind people cross the road whether they want to or not – because it makes him feel good and, at the gigs, he can pocket all the free snacks. Next thing you know, he's telling endless preposterous tall stories about his war-veteran granddad's addiction to crisps.

This is a slow burner. Indeed, the first half of the evening drags at points, with Lee taking a particularly long time to get the audience laughing en masse as he harps on about crisps, looping back to the subject over and over. This doesn't seem all that clever.

Lee is enjoying himself, though, deliberately baiting his punters and pushing the boundaries. Here he's taking the traditional principle that repetition is a comic device, and teasingly demonstrating how tedious it can be. Yeah, crisps... Crisps this... Crisps that. He is banging on like a pub bore who's been given a try-out spot. Then he takes you beyond that, adding increasingly fantastical elements to the satirical as he keeps plugging away, until eventually you buckle and start helplessly sniggering. Or at least, you begin to grin instead of gritting your teeth.

Maybe there's something faintly smug about Lee and his most eager fans: some mutual back-patting going on in the sharing of such knowingly self-referential jokes, his kind of metacomedy, his send-up of stand-up. When one of his lines fails to raise the roof or, indeed, gets only a few people clapping, he wryly analyses why it just bombed or why the unamused majority failed to appreciate his subtle brilliance.

Cavils aside, however, as the evening proceeds, and after the event too, you start to greatly appreciate his twisty wit and craft, his thematic structuring being considerably more taut than it appears at first sight. While seeming quite affable – fundamentally chatty, never hectoring – he is really slating the stupidities, moral hypocrisies and conundrums of contemporary society. By the end of the night, Vegetable Stew has become exhilaratingly caustic, morally complex (including self-criticism), and seriously thought-provoking. Lee particularly targets dumbed-down broadcasting, vacuous and insanely overpaid celebrities, and the nation's confused, half-seduced relationship with David Cameron and his upper-crust cronies.

And moving towards an absolutely storming finish, he half-mockingly reminisces about the simple pleasures of Thatcher-bashing alternative comedy in the 1980s. From there, he moves on to a fascinatingly slippery anecdote, recalling what he fleetingly imagined was a class-bridging friendship with Cameron, when they were both at Oxford University.

Oh, didn't I mention that Lee also comes with an acoustic guitar? He only does two musical numbers, but they're absolute corkers: mellifluous folk ballads shot through with cultural despair, radical irony and rage. This all culminates in an extraordinary barbed love song to the Bullingdon Club – the arrogantly thuggish and boozy, shamelessly elitist undergrad society of which Cameron, Boris Johnson and George Osborne were all members. Scorching.

Watch Stewart Lee on his BBC Two show, Stewart Lee's Comedy Vehicle: