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Once upon a time a British film director called Danny Boyle had the brilliant idea of shooting a fairytale in the slums of Mumbai. He was awarded a budget of two shillings and told to sober up. Max Clifford couldn't have crafted a happier ending. On Sunday night in Los Angeles, Slumdog Millionaire lifted eight out of a possible nine Oscars (it was nominated for ten - twice for Original Song). It is a sensational result that includes the two biggest prizes in showbusiness: Best Picture, and Best Director. But just how significant is this victory?

In terms of kudos it's huge. Slumdog knocked the stuffing out of its portentous, and vastly more expensive rival, The Curious Case of Benjamin Button. David Fincher's tedious fantasy about an octogenarian who grows into a young Brad Pitt won just three awards out of a possible 13 for things such as Best Wrinkles and Receding Hairlines.

Slumdog Millionaire is the first film in Oscar history to win Best Picture without a Hollywood star in the cast. It made the heart sing to see the cast of orphans, who were airlifted from Mumbai, tripping up the red carpet. But what's unsettled the Americans is not the Slumdog landslide, which has been gathering an unstoppable momentum since the Golden Globes. It's the painful admission that Hollywood is no longer making the best independent films in the world.

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Kate Winslet's Oscar for her searing performance in Stephen Daldry's The Reader, and James Marsh's win for Best Documentary for Man on Wire, have cemented the biggest victory the British have ever had at these awards - notwithstanding the awards Anthony Minghella won for The English Patient. What crackled and snapped at the 2009 awards was the atmosphere of romance. I haven't felt that for an age.

You could sense how eager people were to square their anxieties and dreams with films that were mostly completed before the credit crunch was a twinkle in Mr Royal Bank of Scotland's eye. There's an eerie serendipity about the politics. Sean Penn's Best Actor award is a sharp riposte to the anti-gay marriage amendment Proposition 8 in California that is hopelessly out of tune with the rest of the civilised world. But I worry about the future of these films. What's unnerving is how every Best Picture nomination has loomed out of the mist. They haven't been on the radar until the Golden Globes in December. Surprisingly few people seem familiar with the selection the academy actually judges. Which means an awful lot hinges on the result. This seems to be one of the prices directors have to pay if they want their films to compete.

The tragedy is that I've yet to meet two people who agree what the Oscars are for. I asked Mark Borkowski, a PR guru, what it means. “It's a marketing exercise,” he sighs. “It always was and always will be.”

But it doesn't seem to have diminished the power of the award if the TV figures are to be believed. The Baftas have had an amazing year. But the Oscar is still the ultimate seal of approval. The quirky result is that is has a longer reach than the medium of cinema itself. The congregation is ginormous.

An Oscar is fool's gold in the wrong hands. But I think they've got it right this year, though Mickey Rourke must be bleeding inside. That was probably his last chance to win a Best Actor statue.

That said, we should welcome the exotic new horizons that Boyle's film celebrates. He's not just a great director. He's a great human being. He may be useless with big budgets (The Beach). But his guerrilla attitude to film has defined the 2009 awards.

Winslet's triumph is the cherry on the cake. Her performances in The Reader and Revolutionary Road are terrifyingly good. She has matured exponentially. Given scripts as good as these, she is in a different class from the glossy anguish of Angelina Jolie in Clint Eastwood's The Changeling. Meryl Streep was never going to threaten her in Doubt.

The American film industry took some big hits last year, notably the writers' strike and the first tremors of the credit crunch. As Philip Kemp astutely surmised in the International Film Guide 2009, British film-makers are used to gazing into the abyss. In short, that's why we've stolen a march. Can we keep it up?

Finally, even fairytales have to end. The Oscars mark the finish of the awards season. It will be a bitter-sweet feeling for the Slumdog family. This is the last time that they will ever gather together under one roof. For most of them the awfully big adventure is now over. But for a lucky few it might have just begun.

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