Mabou Mines’s lovingly executed interpretation of Peter Pan is not what you might expect from a company long acclaimed as one of America’s leading experimental theatre ensembles. Along with occasional visual references to pop-up storybooks, Julie Archer’s crisp white design scheme draws most freely from the theatrical styles of Japanese bunraku (in which three puppeteers manoeuvre a single puppet) and, less significantly, Indonesian shadow puppetry. Although this and the related animation of objects or props is beautifully achieved, it’s not as if something like it has never been done before. Yet this may be the most poetic, touching version of J.M. Barrie’s classic tale of perpetual childhood versus adult loss that you will ever see.

In narrative terms, Liza Lorwin’s adaptation unfolds in a fairly straightforward way. What is most uncommon in this production — jointly created by Lorwin, Archer and the co-founder and artistic director of Mabou Mines, Lee Breuer — is the Disney-free depth of understanding of its source material, coupled with profound emotional delicacy. Much of the credit for this is due to Karen Kandel’s anchoring presence as the narrator. She is even more integral to the show’s success than was Ofelia Popii’s magnetic Mephistopheles in Silviu Purcarete’s audacious staging of Faust. Indeed, it is almost impossible to imagine the piece without her.

Elegant yet mischievous in a long, high-collared dress, Kandel delivers a performance that shapes up into a protean act of storytelling. She voices every character, including Wendy as both child and adult, the swaggering Peter (a shaggy-haired imp of a puppet with a Scots accent) and a stylish Hook (also a puppet) with a bony white head who is haunted not just by a tango-ing crocodile but also, just a bit, by his inadequacies. The classy, endearing Kandel handles it all with such aplomb that on the first night, when a small piece of the set tipped over, she glided across and righted it without missing a beat.

Although the show dates from 1996, it still feels freshly conceived. Kandel’s astonishing central turn is supported by seven adept puppeteers, all in white with heads covered in gauze, and as many musicians playing a plaintive yet hardy score (by the late Johnny Cunningham) that underlines Barrie’s Scottish roots. The magical, bittersweet tone carries over into a second act that might just move you to tears.

Box office: 0131-473 2000, to Saturday