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Mysteries of Lisbon, Raul Ruiz, 266 mins (PG)

Raul Ruiz, who died this year, has left us with a surreal four-hour story, set in 19th-century Portugal, that reclaims cinema as the language of dream

Film, as last week's Hugo never tired of reminding us, is the language of dream – but looking at the prosaic nature of most cinema, you'd think 90 per cent of directors had never slept a wink in their lives.

One film-maker who did understand dream – as intimately as Buñuel, Tarkovsky or David Lynch – was Raul Ruiz, who died earlier this year. The Chilean-born, French-based, internationally nomadic director was indefatigably productive – his filmography lists 114 titles since the 1960s – and his fragmentary, fanciful oeuvre was like one vast sketchpad for recording images from a supremely fertile unconscious.

With time, this ferociously experimental artist reached a compromise of sorts with the mainstream; this involved working with stars such as Catherine Deneuve and John Malkovich, and making his own idiosyncratic version of prestige cinema. He offered an elegant reading of Proust in 1999's Time Regained, and shortly before his death, revisited the rarefied realm of costume drama in the vast and magnificent Mysteries of Lisbon, released in cinemas as an abridged version of a six-hour mini-series for Portuguese television. Mysteries is based on a 19th-century novel by Camilo Castelo Branco that one assumes is celebrated in its native country – although I like to imagine Portuguese viewers as being as baffled as the rest of us, wondering if Ruiz and screenwriter Carlos Saboga invented the whole thing from scratch.

A dense web of a story begins with a foundling boy, known only as Joao, wondering who he is and how he came to be raised in the college run by solemnly avuncular priest Father Dinis (Adriano Luz). Before long, Joao learns that he is the son of Angela (Maria Joao Bastos), a noblewoman with a tragic past. Suddenly the film sidetracks to introduce a mysterious gypsy on a mission to strike a shadowy deal with an assassin named "Knife-Eater". Then we skip to Lisbon high society, and the appearance of a Brazilian named Alberto de Magalhaes (Ricardo Pereira), a Byronic swaggerer of such dark charisma that women faint when he enters the room. Father Dinis learns the surprising truth about his own parentage; there's a dramatic episode from the Napoleonic wars; a mysterious French femme fatale (Clotilde Hesme) turns up with a score to settle; and more, far more, besides.

The whole affair would be wildly perplexing if Ruiz didn't treat it all with such impeccable decorum. Mysteries is strikingly handsome and well-dressed, and as stately as the great costume dramas of Luchino Visconti. And yet, on a subliminal level that you can't always get a purchase on, Mysteries is also utterly strange.

Staged with deliberate theatricality and shot in long gliding takes by André Szankowski, the film is nothing if not august, but every now and then, in its digressive windings and loopings, it reveals some flourish designed to confound and amaze. Ruiz's visual tricks subtly erode the sense of realism: rooms lose their solidity as actors and furniture glide around as if on castors; simple but sly camera moves allow the protean Dinis to appear and disappear at will. There are some wilder touches too – notably Magalhaes's servant, apparently on secondment from Portugal's Ministry of Silly Tap Dances.

This labyrinthine sprawl of narratives within narratives – akin to Balzac, Dickens and period pulp master Eugène Sue – feels as if it could have expanded infinitely. A majestically eerie ending makes you look back and wonder what the film was really about. A quasi-realistic depiction of 19th-century Portugal? A story told by the adult Joao, trying to make sense of his life? Or one made up by a young boy wiling away hours on his sickbed?

All of the above, or none. The certainties you expect from historical drama are systematically melted down. Characters' identities are unstable, in permanent flux: Father Dinis has several names and guises, while Joao is played, at different times of his life, by three separate actors.

Four-plus hours (with intermission) is quite an ask, but Mysteries is time well spent – not in a narrow value-for-money way, but in the sense that it offers a hallucinatory experience of fluid time passing, speeding up, slowing down, being suspended. It's tempting to say that Mysteries of Lisbon is "the 19th-century novel on acid". But this isn't strictly true: the film isn't surreal per se, so much as homeopathically dosed with surrealism, so that the quality of dream runs through every moment at a deep, not always detectable level. Mysteries of Lisbon is a subtle delirium, and a magnificent late magnum opus from a director who was one of a kind.

Next Week:

Jonathan Romney sees The Girl With the Dragon Tattoo, as reinvented by David Fincher

Film Choice

Trucking, with baby on board: Pablo Giorgelli's prize-garlanded Argentinian feature Las Acacias offers a tender, taciturn picture of a relationship blossoming between a gruff lorry driver and the mother and baby who hitch a lift with him on the highway from Paraguay to Buenos Aires. Elsewhere, Anna Paquin excels in Margaret, the many-years-in-the-making feature from Kenneth (You Can Count on Me) Lonergan.