It is festival time on the Royal Mile, and futile promotional mania reigns. Sword fights are breaking out, bloodied gangsters are crawling over the cobbles, impossibly confident flyer-thrusters from the Cambridge Footlights are getting on everyone’s nerves and a group of American students are gamely trying to sell the world “uplifting Christian comedy”. Despite this desperate blizzard of activity, most of these pocket starlets will tonight perform in front of tiny, empty theatres. Twenty seats, with no bums on them — that is the reality for most of the perpetrators of Edinburgh’s August theatrics.

Meanwhile, just around the corner, more than 150 people are watching Sam Wills climb through a tennis racquet. He then slices a cucumber with a machete (using a terrified volunteer’s stomach as the chopping board) and finishes his show, to great waves of applause, by knife-juggling atop a 6ft wobble board. “Ladies and gentlemen,” he bellows through the din, “you’ve been watching live street theatre. This is my job, and my art. Thank you very much — the exit is through this hat!” As the bulk of the crowd moves forward, wallets open, it seems it might be time to reassess who the real stars of Edinburgh are.

Street theatre, it turns out, is in rude health. With the revival of circus schools and the burgeoning festival scene, an ever higher calibre of athlete, acrobat and artist is joining the increasingly competitive cobblestone circuit. There is now an annual street-performance world championship, in Dublin in June, as well as a raft of sideshow and modern circus tours; and the recent offspring of street theatre, living sculpture, has blossomed into an eye-popping art form. (The human-sculpture world championship, with more than 100 works of art, including tableaux of up to a dozen performers, takes place in Arnhem, Holland, at the end of this month.) The close-knit community of street performers follow the decent weather and arts festivals around the three most welcoming regions, Australasia, Canada and Europe — but largely give America a miss. As the glass-ball juggler Robin Spehar says: “In Europe, people say, ‘Look, it’s street theatre!’ In America, they say, ‘Look, a beggar!’ ”

A roll call of the world’s elite street performers can be found in Edinburgh this summer. Gnarled Aussie Shep Huntly is something of a godfather figure — the compere at the Glastonbury circus tent, he’s been performing for 17 years and will, honest to God, pick up a car battery with his nipples if you put enough cash in the hat. The UK’s best — who, like a true Brit, scored a bronze medal at the last world champs — is Stuart Goldsmith, a comic turn whose inspired finale involves eating a packet of crisps while walking the tightrope along an audience-hauled tug-of-war. Then there’s the classically trained actress Sharon Mahoney, who clowns around as the comedy Canadian tourist Tallulah. “You don’t get many women doing this, because persuading strangers to stop and watch you perform is an ‘alpha’ activity,” she says before heading off to prove the point, enticing a bemused Finnish tourist to thrust his groin towards a gathering mob, shouting: “I am a warrior! I am a peacock! Hear me roar!”

At the very top of the tree, the current street theatre world champs are the English Gents, a pair of acrobats from Melbourne whose strongman show is easily the equal of anything you’d catch at Cirque du Soleil. Yet, as the Gents are in fact professional cabaret stars (part of the adult carnival show La Clique), who do street performance on the side “just because we find it really satisfying”, they’d surely be gracious enough to concede top billing to the closest thing the street scene has to a rock star.

Two-time world champion, quadruple Guinness World Record-holder, built out of muscle, tattoo ink and piercings, the Space Cowboy gathers crowds that nobody else in Edinburgh can muster without a seat on Mock the Week. “I’ve been doing this since I was eight years old,” says the Cowboy (real name Chayne Hultgren, and another Aussie). “I just love this job.” He’s certainly got the hang of it — his show includes swallowing two 3ft swords at once, riding a 10ft unicycle with one foot, while using his spare peg to kick a bowler hat onto his head, and, for a grandstand finish, blindfold unicycle juggling with two scythes and a flaming torch. When that works, unsurprisingly, the crowd goes nuts.

Do they, however, reach for their wallets? The mechanics — and economics — of street theatre are as intriguing as they are carefully protected. How do you gather a crowd? How do you hold them? And how do you turn that attention into cash? To get under the skin of the street scene, it was clear an idiot was needed to give it a go.

Without the three spare years needed to attend circus school, I had little choice but to plump for street theatre’s newest branch — human sculpture — and expected little but derision from the sword-swallowers and flame-jugglers in return.

“Oh, no, mate, living sculpture’s really hard,” Wills said. “A lot of those guys are trained circus performers. It’s hard work — you’ll struggle.” At the elite end of street sculpture, performers such as the Toronto Silver Elvis use mime and technological trickery to produce shows that barely involve being still at all, while the 2007 world champion, the San Francisco Barbie, can handle two hours of standing motionless with her eyes closed (try it for two minutes), as the doll’s eyes are painted onto her eyelids.

The first challenge of any street art, everyone explained, is getting “an edge” — a physical, unbroken line of gawpers who will draw in others and hold in the secret ingredient of the trade, the “energy”. Every street artist talks about it constantly: the buzz that can gather and concentrate, turning a pavement into a stage, but dissipates immediately when the edge breaks, or you make an error, or a tramp interrupts. Then the spell is broken and the shopping trips restart. Hold the energy, though, and it goes in the “hat” — the obvious title for the take-home pay. What’s a good hat? Nobody’s telling. “If people know what we make, they won’t cough up,” Goldsmith says. “Or they’ll try it themselves.”

Armed with low expectations, a shiny copper policeman’s uniform, a comedy truncheon and a vintage Girl Guide’s whistle, I claimed my pitch outside the National Gallery of Scotland and carefully prepared for the pinnacle of my journalism career — by straightaway stuffing up the face paint and turning myself into Police Constable Robert Mugabe. Undaunted, and doing as I’d been advised, I mounted my bucket, took a relaxed stance, focused on a point high above the audience’s heads — “or your eyes will follow the women” — and froze. It wasn’t long before the first plink of loose change reached my ears: a small boy sent toddling forward by his mother. I rewarded the youngster with a shrill whistle and a wave of my truncheon — and made him cry.

For 30 minutes, there was little improvement — no edge, and energy flowing past like a spring tide. One woman dropped some coppers, got a cheery blast and a wave, then stood there for 10 minutes repeating: “Is that it? Is that really it?” My feet began to ache, a constant stream of sweat formed down my spine, my spirits and shoulders sagged. I couldn’t give up, though — people were relying on me for directions. “Yeah, I’m standing next to the shiny policeman. . . No, he’s rubbish.”

Then, as the pain induced a comatose stillness, a significant truth about public art emerged — it’s the public that make it. A gaggle of young lads started pratting around, tugging at my coat and poking my legs. A few swipes of my truncheon and suddenly our little group performance had an audience — then an edge. Money started tinkling freely,

I started hamming it up — wolf-whistling at female donors, posing for holiday photographs, milking the energy, genuinely enjoying every minute. Then a drunk clobbered me in the stomach with a hospital crutch, the edge collapsed and I called it a day.

The street-performance fraternity were quite keen that I didn’t say how much I’d made — but the heartless Culture section insisted. In one hour, just over 40 quid. “You have to remember, though, that you’ve just worked the Edinburgh Mound in August, one of the best pitches in the world,” Goldsmith observed. “The poor sods standing in a toga on the South Bank don’t make anything like that.”

Yet if, as it seems, some street artists are making decent money these days, that’s surely nothing to be shy about.

At the top, they’re elite performers who are being paid precisely what the audience thinks they deserve. The final word always comes at the exit — which is, ladies and gentlemen, through the hat.

Brian Schofield’s costume came from www.area51site.com