FAIRYTALES, LIKE MUCH else in children's lives, have received a makeover of late. Harder, sharper and more sinister than those that gambolled across Western consciousness in A Midsummer Night's Dream, they have become more technologically advanced in Eoin Colfer's riotous Artemis Fowl series, more sexually predatory in Melissa Marr's Wicked Lovely and more subversive in Terry Pratchett's The Wee Free Men.

All of which is tremendous fun for readers aged over 9, but Kate Thompson's Creature of the Night is something teenagers shouldn't miss because it goes to the heart of our lingering superstitions concerning the Little People.

Thompson is an Irish children's writer of dazzling talent and inventiveness who is an all-or-nothing talent whom bright children either love or loathe at first sight. She won the Whitbread Children's Book Award for The New Policeman with a captivating comedy about our perceived lack of time. However, the quirkiness of novels such as Switchers and Only Human have made her seem more eclectic than she is. Creature of the Night should bring her a much wider audience; my 15- year-old kept shoving it under my nose with notes saying YOU MUST READ THIS.

For a start, it's horribly funny. Bobby, the narrator, has been moved by his ma from Dublin to the countryside. His horrified reaction, which not even the promise of a new Xbox can soften, is amplified by his leaving behind a life of minor but increasingly violent crime. Desperate not to vegetate with his maddening little brother Dennis and his impoverished, slatternly mother, Bobby mends the abandoned Skoda left by the last tenant.

But then his little brother starts talking about a tiny playmate, an old woman who comes through the dog flap, for whom food must be left out. Is he imagining it? What is the tragedy that nobody will talk about, and why is it bad luck not to leave milk out for the fairies? The truth can't be revealed without spoiling a tremendous twist involving murder, but Thompson's magical voice has reached new heights of comedy in a strikingly original piece of fiction.

What a pleasure to encounter an author who understands that writing for a younger audience doesn't mean depriving them of good style. Anna Dale's Spellbound has a clever heroine, Athene, who may be searingly jealous of her younger brother Zach, but she knows the meaning of “viridian”. Unfortunately, her feelings lead her to abuse an exciting friendship with the Gloams - small, magical people who can see in the dark. But when she deliberately sends her brother into a tree, to be trapped for ever underground, her conscience strikes her. Like Sendak's Outside Over There and Christina Rossetti's Goblin Market, this uses the emotions aroused by sibling rivalry to explore the true meaning of sibling love.

Fairytales need to be handled with care to avoid descent into the twee - the worst being the ghastly Rainbow Fairy series, which no self-respecting child should touch with a bargepole. Spellbound is the opposite of this. Funny, clever, wise and charming, it's the kind of story that both girls and boys of 7+ will enjoy, and a pleasure to read aloud to younger ones of 5+. Being away with the fairies is not just a delight this summer, but something that will transform children for the better.

Creature of the Night by Kate Thompson
Bodley Head, £10.99; 272pp Buy the book here

Spellbound by Anna Dale
Bloomsbury, £10.99; 448pp Buy the book here

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