At an art gallery in east London, a baby-faced lad in a skinny T-shirt and baggy jeans is playing banjo or finger-picking a guitar. Between haunting songs about prison, death and making your own wedding dress, he stops to read a passage from Henry James’s The Wings of the Dove, then turns it into a comedy sketch. The performer is Sam Amidon, a 26-year-old from Vermont who has been singing these songs for most of his life, as his parents did before him, and still do. To a lot of the hip, young audience, however, they could be brand-new: his covers of traditional folk songs, some centuries old, are the only versions they have heard.

Not for the first time, traditional folk is enjoying a revival. For this comeback, though, the music has quit its usual habitat of folk clubs and festivals for rock venues and arty parties. Its fans are far from typical folk followers and new recordings are coming out on cutting-edge indie labels.

In America, Amidon is at the forefront of a scene in which the musicians are mostly second- or third-generation revivalists. His parents, members of the Word of Mouth Chorus, a 1970s group performing “sacred harp” religious songs, taught him fiddle at the age of three and took him on stage when he was six. At 13, he released his first album of Irish and New England fiddle music. “As a child, all I knew was traditional folk,” Amidon says. “I spent holidays at folk festivals, and my friends were all children of folk musicians. If I couldn’t sleep at night, my dad would take me for a walk and sing me murder ballads. That’s perhaps not the best parenting technique, but I adored the stories.”

In high school, Amidon discovered indie rock. In an attempt at teenage rebellion, he moved to New York, took up guitar and joined various indie and free-jazz bands. What he didn’t expect was to find cool city kids listening to the music he was trying to escape. “I was in an underground-rock CD store when I saw them adding a section for field recordings,” he recalls. “It was the sort of dorky stuff I made on the weekends and kept quiet about to my classmates. Then I went to a club in Williamsburg and the DJ was playing sacred-harp records. I couldn’t believe it.”

While trying to learn the guitar, Amidon returned to the murder ballads he knew and began messing around with the arrangements. After a gig in Reykjavik, his friend Nico Muhly, a New York-based composer, invited him to the studio of Valgeir Sigurosson, a Björk collaborator, and in two hours they recorded the 10 covers that would become Amidon’s new album, All Is Well, released on the boutique label Bedroom Community. Muhly added orchestration and Sigurosson electronics, while Amidon’s warbled vocals and the spooky atmospherics hark back to vintage recordings.

“Sam’s treatment of those old songs is incredible,” says Aoife O’Donovan, a fiddle-player with the Boston-based folk revivalists Crooked Still. “He inhabits the characters in the stories and captures their emotions, but the music feels fresh.” Like Amidon, Crooked Still are breathing new life in songs so old, nobody knows who wrote them or, often, where they originated. “We play The Absentee, which has been sung in oral tradition for hundreds of years,” O’Donovan says. “The song came over from Scotland or Ireland, but here we have the Kentucky version, the North Carolina version and so on. Wherever people played it, they changed it. Now we’re putting our own spin on the songs. We perform at rock venues, but we also play at folk and blue-grass festivals, and even the old-timers admire what we do.”

Amidon and Crooked Still are just starting to write original material, but Uncle Earl, an American band of four women, have long mixed string-band classics with contemporary compositions. Five albums into an acclaimed career, they fill pop venues with a modern take on square-dancing songs and folk covers from the 1920s and 1930s. The glossy kung-fu video for their latest single, Streak o’ Lean, Streak o’ Fat, they call “clogging meets Kill Bill”. “I grew up on pop, rock, country and choir music,” says Kristin Andreassen, Uncle Earl’s Washington-based singer and fiddle-player. “At college, I felt alienated. Then I discovered American fiddle music. It was the social scene and the way people relate to the songs that drew me. We’re not virtuosos, but we enjoy pushing the boundaries of what is considered traditional folk. Our aim is to bust open old folk music, to see what other styles we can slot in, yet remain true to its roots.”

The traditional folk revival isn’t confined to America. Lau, in Scotland, and The Ducks, from Canada, are part of a scene that acknowledges each country’s debt to the other. In London, Johnny Flynn, 24, a South African-born performer, has a major-label deal for his infectious take on back-porch folk. “To me, indigenous music has a lot more weight than trashy indie guitar music,” he says. “I am fascinated by music as storytelling – tales that are passed down through generations and refined according to the times. Folk should reflect what is going on in the world, so I take themes from the past and apply them to the present.”

Flynn and Amidon suspect the trad-folk revival may be a reaction to the clinical sound of downloads. “Most modern music is soulless and seamless,” Flynn says. “The digital process irons out any human element. I want to hear vinyl crackles and the whirring of a tape – anything that makes the music feel real.” Amidon agrees. “The rough sound is definitely part of its appeal,” he says. “None of us wants to make polished music. These days, it’s all about DIY, and we’re definitely doing things our own way.”

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