IF THE destiny of the Palme d’Or were determined by pure pleasure, then Shrek 2 would have stormed away with cinema’s leading art-house prize.

It’s another potty animated romp with the astonishing digital dolls having lost none of their ability to surprise and delight. The effects are state-of-the-art, the shading more naturalistic and a cracking script plays fresh tricks on a new batch of fairytale loons.

Here, Mike Myers’s grumpy ogre is forced to leave his beloved swamp to seek the nuptial blessing of Princess Fiona’s parents, the King and Queen of Far Far Away (John Cleese and Julie Andrews). The regal in-laws are not amused. If you incarcerate your daughter in a tower at great expense, you expect her to return in triumph with Prince Charming. You don’t expect her to get hitched to an ogre, and then turn into one permanently.

Shrek 2 is a fabulous clash between swamp life and privilege, and Mr and Mrs Ogre are welcomed by Fiona’s parents with as much enthusiasm as a Bombay public convenience. Far Far Away is the Beverly Hills of fairytale kingdoms: a clutter of stretch coaches, themed medieval shopping malls and glittering palaces where bored stars such as Cinderella hang out.

Not only does the King decide to murder Shrek by hiring Puss in Boots, but the David Beckham of Prince Charmings — wonderfully voiced by a high-camp Rupert Everett — plots to seduce Fiona and steal the throne. The fiendish twists are wrapped in a terrific parody of big-city life. No one is what they seem. Fiona’s Fairy Godmother (Jennifer Saunders) is a scheming siren with a blue-rinse beehive, and Antonio Banderas’s Hispanic Puss in Boots turns into an unexpected ally.

The set-piece spoofs are sublime. A reality TV cop show called Knights shows Shrek and his sidekick Donkey being chased by the King’s soldiers. Joan Rivers commentates on celebrity guests as they pile up the red carpet for the Oscar-style ball of the century.

This might be a make- believe story about vanity, ego and greed. But at times it looks spookily like last night’s party on the Croisette. Tom (Cruise?) Thumb and Thumbellina are flattened by a narcoleptic Sleeping Beauty.

The pace of the last reel is a comic marvel. It’s a pixellated orgy of film and fable references. Shrek and Donkey drink a potion that transforms our hero into a he-man and Donkey into a stallion. “Now we’re sexy!” shrieks Eddie Murphy’s clodhopper. But Shrek has to fight again for the right to be ugly. That, of course, is true love in La La Land.

The wholesome dodgy point is the right to fashion your own happy ending. The real happy ending is that DreamWorks has announced plans for Shrek 3 and Shrek 4. I doubt they’re unduly worried about winning prizes.

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