Swinton takes on Cannes with cup cakes and Scottish rain

When Tilda Swinton announced plans for a film festival in her home town of Nairn in north-east Scotland, she said she wanted it to be the antithesis of the glitz and glamour of Cannes. As it opened yesterday, the Highland weather was doing its bit to help. "I did a rain dance last night and it seems to have worked. What better place to be on a rainy August afternoon than in a cinema?" she said.

The Oscar-winning star of the film Michael Clayton has taken over a former bingo hall, or The Ballerina Ballroom Cinema of Dreams as she has rebranded it for the next eight-and-a-half days. During this time she and her fellow curator, the former Edinburgh International Film Festival director Mark Cousins, hope to create what they describe as a "state of cinema" – one which exists as a "state of mind, without borders or policies or exclusion".

Swinton seemed relieved that the idea had taken root yesterday with all 140 tickets having sold out for the opening film, Peter Ibbetson, the 1935 classic starring Gary Cooper and Ida Lupino.

This was certainly cinema with a difference – appropriate enough in the resort where Charlie Chaplin chose to spend his summer holidays each year. While tickets cost just £3 (£2 for concessions) entry is free if you bake your own fairy cakes. Swinton set the ball rolling by bringing her own homemade cup cakes, arriving shortly before the opening dressed in a pink cardigan and flip flops. The actress looked more mother hen than A-list Hollywood celebrity who has appeared alongside stars such as Tom Cruise, Leonardo DiCaprio and Keanu Reeves. She busied herself tending to a child, chastising the family dog as it snuffled among the brightly coloured beanbags and deckchairs laid out for cinema-goers to relax in, pouring tea and serving cake.

The festival line-up is something of a homage to Federico Fellini, with the programme culminating in a screening of his 1963 tour de force, 8. There are films chosen by the director Joel Coen as well as the Scottish premiere of three Derek Jarman shorts. "This is all about a cinema-shaped hole in the high street of a small town and most small towns across Europe," she said. "There used to be two cinemas here but now there are none. It is a gift for me to share these films with people."

The local community has rallied round to lend support to their famous neighbour, who cuts an unobtrusive figure shopping in the high street with her two young children and partner, John Byrne, an artist. She describes her decision to stage the festival as "Quixotic". In the three months since hitting on the notion, she and the people of Nairn have transformed the disused building into a fantasia of rococo design – the antidote to the popcorn-scented warehouses of the industrial park multiplexes.

News of this cinematic free state has reached across the world. One report suggested the Hollywood actor George Clooney was coming to take a look. Others have travelled to the festival from as far away as China and Canada.

The owner of Nairn Bookshop, George Gray, has spent much of the past few weeks selling tickets. "Tilda is a wonderful person. When she had the idea she came in and said 'Am I mad?' Since then she and John have worked really hard. People in the town volunteered – someone would do the painting, someone would do the cleaning, someone would hammer nails into a piece of wood."

First in the queue yesterday was Joseph Wallace, 22, from Coventry, who described himself as a "film buff/film-maker". He is spending the next week in Nairn. "This is amazing. I have come to experience the films. Most of these are never in conventional cinemas and rarely found on DVD. And now Tilda Swinton has just walked past."

Despite the success, Swinton and Mr Cousins appear unlikely to turn the festival into an annual event. Their next project together will be the creation of a children's film foundation based on Fellini's premise that 8 is the perfect age to fall in love with the silver screen.

The Nairn festival

*Dames Selected by Joel Coen, this 1934 film about a millionaire who tries to clean up Broadway has touches of of Fellini.

*Boswell and Johnson's Tour of the Western Isles Robbie Coltrane and John Sessions star in this 1993 filming of James Boswell's Hebridean memoir.

*I Was Born, But... The director, Yasujiro Ozu, has a surprise in store for two pre-War Japanese boys who don't respect their lowly ranked father.

*The Bill Douglas Trilogy Three shorts from the Seventies by Scotland's greatest film-maker about a lad in East Lothian after the war.