Lady Gaga, MEN Arena, ManchesterHole, O2 Shepherd's Bush Empire, London

There are visions still tick-ticking in Lady Gaga's brain, while Courtney Love's caustic scream is a blast from the past

She is the greatest thing to happen to pop this century. Let's get that marble-carved fact out of the way first. And she's sufficiently self aware to understand why: "The Monster Ball," Lady Gaga promises tonight, "will set you free."

Looking around the MEN Arena, I'm reminded of those old pictures of the audiences at early Sex Pistols gigs. People who were Bay City Rollers fans a year earlier, now hacking chunks out of their hair, ripping holes in their jeans and sticking safety pins in their shirts: a photographic record of the exact moment that someone's world changes forever.

Gaga is having the same effect. She's a force for liberation, nothing less. Girls (and guys) who, 12 months ago, were living lives of Ugg-booted, spray-tanned conformity are now rocking feather epaulettes, stick-on jewelled lightning bolts across their faces, and all manner of burlesque improvisation. It's beautiful to see. The stage, a Gotham-like urban dystopia, consists of a staircase with syringes for balusters, and assorted flickering neons. One stands out. It says "Ugly Sexy", and says it all.

What's brilliant about Gaga, you see, is her ability to take the transgressive ideas of performance-art predecessors like Klaus Nomi and Leigh Bowery and make them mainstream. Like those two, she emphasises the grotesque – literally making a monster of herself – and whether she's in quarterback shoulderpads or Beetlejuice stripes, whether she's a witch queen, a giant tassled lampshade or a PVC-nun-meets-Marilyn-on-the-air-vent, she ups the ante so dramatically that you wonder how any other pop star can compete.

With props such as an armoured DayGlo taxi (flip back the roof, and inside there's a synth), a bench made of razors, a Virgin Mary fountain, and a huge sea monster, this is indeed a monster of a show, dwarfed only by the greatness of the songs, whether it's a heartfelt piano ballad like "Speechless" or an electro-pop anthem like "Bad Romance". Being among 20,000 people chanting the raa-raa intro to the latter sends shivers through the hackles.

Yes, you can tell it's the opening night. Yes, you can see the joins. But you can also see the genius – not a word I throw around lightly, but Gaga's got it, which is why, right now, the whole pop world wants to take a ride on her disco stick. So many times, looking at the 23-year-old tonight, I think about the visions still waiting inside that brain, tick-ticking away behind that ugly-sexy face. Whatever comes next will be the bomb.

Let's build a bonfire. Take all the obstacles to remembering how great Courtney Love and Hole used to be. Take the depressing dabblings with showbiz-Buddhism. Take the sucking-up to Hollywood and fashion elites. Take the ugly tug-of-love over custody. Take the almost as ugly in-feuding over the Nirvana legacy. Take it all, flick the Zippo and watch it burn.

Within the first few seconds of the first Hole gig – or "Hole" gig, but we'll come to that – in more than a decade, all that is forgotten. She may look like a melted Dee Snider doll, and may need a teleprompt these days, but as she lets out that caustic sandblast of a scream, you remember Courtney Love has one of the great rock'n'roll voices.

There are many valid misgivings about this enterprise. Founder guitarist Eric Erlandsen disputes Love's legal right to the Hole name, and former close friends have accused her of dishonesty in replacing key musicians with twentysomething "scene-sters". She's aware of the criticisms. "Don't say 'Courtney'," she instructs fans, "say 'Hole' – we're a real band."

The scenesters are drummer Stu Fisher, guitarist Micko Larkin and bassist Shawn Dailey, who Courtney "has sex with all the time". Dressed in black, they're competent, and shadowy. All the illumination is centre-stage. In sparkly tiara and red Rickenbacker, Courtney Love isn't in the spotlight, she is the spotlight.

Riot-grrrunge classics like "Miss World", "Violet" and "Celebrity Skin" are ripped into with relish. Of the "new" material, "How Dirty Girls Get Clean" and the single "Samantha" can stand up with the canon.

The human car-crash many were expecting (and secretly wishing for) fails to materialise. The Courtney who rampaged nude around London for a Q photo shoot is dead. "No more taking it off, son," she chides a tits-out heckler. "Those days are over." Instead, we get an old-fashioned paint-blistering rock show. And it is, in her own words, "not too shabby, bitches".

Next Week:

Simon finds out if the next wave (Girls, Hurts, Japandroids, Frankie & the Heartstrings) are worthy of the hype