Ever since the Big Chill threw an outdoor party for 500 people in a field near the Black Mountains in Wales 15 years ago, the “boutique” summer festival with its warm party atmosphere has blossomed.

Today the Big Chill attracts about 35,000 people, which doesn't sound small until you remember that Glastonbury hosts a heaving mob of 135,000. Fond memories of its famously chilled-out early days have even persuaded festival legends Orbital to re-form. They headline the Big Chill on August 8. The festival's legacy has been far-reaching. According to Virtual Festivals, which runs the annual Festival Awards, four million people attend British festivals each year - 80 per cent going to the boutiques.

Why do we like them? Smaller crowds, cleaner loos, friendlier atmospheres, stuff for the kids, and quirky, eccentric entertainments that stretch well beyond a few star bands. These all appeal to the ballooning band of well-educated thirty to fiftysomething festival-goers.

The small festival is also, according to Freddie Fellowes, who runs the Secret Garden Party in Cambridgeshire, a chance to escape the drudgery of our normal lives: “Secret Garden Party is there to be playful, to break down barriers between people and create an environment where you have perfect freedom and perfect nourishment, intellectually and visually.”

Often cited as the friendliest and most eccentric boutique, Fellowes's unruly brainchild won last year's Best Small Festival Award. Imagine a four-day party organised by Withnail and I and Terry Gilliam, and you'll get some idea of the hedonistic atmosphere and anything-goes lunacy. The event began modestly in 2003 - effectively a private party for 600 people - but this year Fellowes is making room for 10,000.

A misspent youth as an “absolutely awful” student at Eton led Fellowes, a 30-year-old, dreamy-eyed aristocrat, on to art school then work as a party organiser. Aged just 23, he picked a beautiful festival site around a lake (conveniently belonging to the estate of his father, Lord de Ramsey) and decided to create his own event. From the start he wanted to take the boutique concept one step farther. “Secret Garden Party is about getting people involved with each other, rather than just standing there looking at something, or queueing for something,” he says. “The festivals you remember are not the ones with the best music or the best lighting. They're the ones where you met extraordinary, funny people and laughed all night.”

Inspired by the rave scene, Sixties underground artists, and freewheeling, artistic festivals such as the Burning Man in Nevada, the Garden Party offers people a chance to “break out and come alive for a while.” To encourage this, he hires actors, dancers and acrobats to dress up, organise games and spontaneous performances, mingle and dance with the crowd. Here you'll find a Space Hopper Grand Prix, Spanking Workshops, Suicide Sports, bubblewrap-popping contests, and a philosophy debate entitled “Arrive with Questions, Leave in Tears”. It all means that ticket holders turn up and do stuff themselves - madcap installations, outrageous costumes, humorous events and workshops.

“A lot of what happens at Secret Garden Party was inspired by the Burning Man festival,” Fellowes says. “I went there and found it incredibly inspiring. There is no money behind it, it's created entirely by the ticket holders. Without everyone bringing their little bit, it wouldn't be what it is, which is the best party in the world. Magic things happen there. It's a life-affirming event.”

Secret Garden Party is refreshingly tolerant (and a magnet for life's more entertaining misfits). Fellowes isn't bothered by the age and demographic of his festival-goers. He just wants people “who get it” to come. “Anyone is welcome. The nature of it is that it has to be inclusive. Otherwise it's up its own arse.” That goes for the performers, too. After their set musicians have to join in the fun or go home because there are no VIP areas. “Well, they get a dressing room,” says Fellowes. There are no pits or barriers by the stage, either. “You're close enough to touch their shoelaces.”

Grace Jones readily embraced the “gardener” philosophy, pulling people up on stage and opening the doors of her Winnebago to anyone who wanted to come in. Echo and the Bunnymen enjoyed it so much that the organisers had a problem persuading them to leave.

Jarvis Cocker headlines this year, and the theme is Babylon and Eden. Fellowes says: “One half of the festival will be like the salacious hothouses of Babylon; the other side will be Eden - earthy, open mikes, acoustic areas. It's exploring the half of you that wants to eat muesli in the morning, and the other half that, by the afternoon, wants to get straight into a Martini.”

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