Prolific, prodigiously talented but not consistent, the British director Michael Winterbottom returns to The Times BFI 52nd London Film Festival with his latest picture, an enigmatic but ultimately underpowered study of bereavement set in Genoa.

The film opens with an effective pretitle sequence set in a family car. A mother (Hope Davis) and her two daughters, the teenaged Kelly and the younger Mary, are playing a guessing game during a long journey. It’s a seemingly innocent sequence but the snow on the road and Winterbottom’s clever sound design means that the threat of tragedy looms like a juggernaut in the rear view mirror. When the crash comes, it may feel inevitable but it’s no less devastating.

The story rolls forward by several months. Colin Firth plays Joe, the widowed father struggling to fill the role of both parents to the two girls while grappling with his own grief. Mary is haunted by nightmares that leave her sobbing for her mother. Kelly is plugged into an iPod, self-contained within her own newly discovered beauty. When Joe is offered a teaching position at Genoa University, he takes it, hoping that a change of scenery might help the family to come to terms with their loss.

Shot with a nervy hand-held camera (by Winterbottom’s regular collaborator Marcel Zyskind), the city is immediately fascinating. The family find themselves exploring a maze of winding alleyways – a location choice that’s presumably a deliberate homage to Nic Roeg’s Don’t Look Now. The knowing glances of the locals – a collection of twisted crones, blowsy hookers, shifty rat-like men – contribute to an atmosphere that prickles with foreboding.

While the shared grief binds the father and his daughters together, the city conspires to force them apart, both physically – the winding alleys are a maze that separates one from another – and mentally. Joe concentrates on his work, Kelly flits around the city with boys on Vespas, and Mary begins to see her mother everywhere. It’s never clear whether she is a benign spirit or a figment of the child’s imagination.

This is, first and foremost, an atmosphere piece and as such it’s initially successful. The problem is that having imbued the city with inchoate dangers at every turn the story fails to deliver a satisfactory payoff. To avoid sentimentality and melodrama in a film about bereavement is admirable; to avoid drama altogether seems self-defeating. There is one genuine moment of suspense when Mary disappears during a family trip – but the resolution is maddeningly anticlimactic. Friction grows between Joe and his older daughter but rather than explode into confrontation the tension fizzles out. It all feels a little half-hearted.

Editor's choice

• The 100 Best Films of the Decade
• 70 facts you didn't know about Marvel
• The 50 Biggest Movies Of 2010