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It's hard to think of a better Christmas present for a film critic - especially for one who laments the absence of smart romantic comedies - than Shakespeare in Love (coming to Britain in late January). But it's a gift everyone else can share. Shakespeare, I suspect, will be very well reviewed. Even those who have found Gwyneth paltry have reason to reassess the young woman. More than that, don't be surprised if it gets a Best Picture nomination. Then, with the confident marketing drive of Miramax behind it, it could stroll away with the prize, leaving larger pictures out of breath.

There may be a chance later to measure the degrees of charmed collaboration on this picture. Yet just because its energy and fictional potential grow out of how little we know about the real Will Shakespeare, maybe investigation should be reined in. Let us conclude that somehow, the different skills which director John Madden (Mrs Brown), first screenwriter Marc Norman (Cutthroat Island and Waterworld), and Tom Stoppard, the belated doctor to the show, have made for something we had no reason to expect.

It is 1593, and Will Shakespeare (practising his signature and its spelling, as if in search of identity) is just one actor and writer in the cockpit of London. Worse, he has such writer's block that he visits Dr Moth (Antony Sher) for ... therapy (?), and feels in the shadow of the handsome and faintly dangerous Kit Marlow (Rupert Everett). Then he sees a beautiful young woman, Viola, and the block lifts. He will turn his lumbering work-in- progress - Romeo and Ethel, the Pirate's Daughter - into you know what.

He will bed his Viola, even as she is being married off to Lord Wessex (Colin Firth), and when the show faces the sudden fracturing of its boy Juliet's voice, why, Viola can step in and do the job properly. Of course, the Master of the Revels (Simon Callow) jumps up and orders the theatre closed because a woman has sullied the stage. But there is another turn left to save the day, and mark young Will down as the hot ticket in late- Elizabethan theatre.

Perhaps it sounds just a clever romp, as well as an artful exploitation of history's ellipsis. The sense and look of Elizabethan London is nicely yet modestly rendered - but not so neurotically that the film can't sport sly anachronisms (a bit of dumb pottery labelled "A gift from Stratford- upon-Avon"; the knowing use of a bloodthirsty young rascal who will grow up to be John Webster, and so on). I was reminded of Stephen Sondheim's Into the Woods. The look and the tone of fairy tales are honoured, even as smart young actors (and writers) are replaying the old game.

It's funny to see the clumsy errors of young Will's attempt to make a play. But nothing takes away from the magical realisation near the end that somehow (how? It's a mystery, is the film's refrain) the real thing, our Romeo and Juliet, has come through, as potent as ever. The hush in the audience as the play ends may move you to tears.

This is a movie in love with theatre, play-making, and the playfulness of words. For those reasons alone, I feel that much is owed to Stoppard. He has been a rather detached observer of the cinema. He did direct his own Rosencrantz and Guildenstern Are Dead, and did a good job. But his scripts have seemed like assignments done for the money or for friends: Despair, The Romantic Englishwoman, The Human Factor, Brazil, Empire of the Sun, The Russia House, Billy Bathgate. I defy you to feel Stoppard in that list.

But here, as a rewriter, he seems to have found himself, and pleasure in the work - the exhilaration that marked Travesties, Jumpers and Arcadia, not to mention the fusion of history and our imagining of it. What a sweet coup it would be if, in freeing Shakespeare of one block, Tom Stoppard had discovered that movies might be fun for him.

I recalled Olivier's Henry V, which actually gives the feeling of the Globe rather better than this film, just as it still astonishes with its leap from painted sets to the real fields of Agincourt (supplied by the grace of Ireland in 1944). But Henry V was more than that. It came as the war ended, and it was a tribute not just to British martial victory, and the brotherhood of Crispian, but to that other essential proof of English courage and tenderness - its theatre.

So close to the end of the century, Shakespeare in Love has the same dry pride, and when Judi Dench appears as Queen Elizabeth herself (obviously a lost cousin to Victoria), it's hard to resist the notion that even if today's Elizabeth is not quite genuine steel, still by God we have Dame Judi, along with players like Callow, Sher, Everett, Tom Wilkinson, and some amiable foreigners - Paltrow, Geoffrey Rush and Ben Affleck, who plays Edward Alleyne, a great actor who put his money into a college at Dulwich.

Shakespeare creeps up on you: it goes from knockabout and wordplay to something mysterious and stirring - there, again, it made me think of Sondheim. Let everyone share in the credit. And, since at the close Will is trying Twelfth Night, with his Viola striding on to some American shore, I will - for once - urge the cause of sequels on Miramax. If Stoppard remains part of the company.