Super Furry Animals, Royal Festival Hall, London

Animals set loose on the South Bank

It's not often a pop band gets to turn a major cultural institution such as the Royal Festival Hall into something resembling the inside of their own frazzled heads. Letting the Super Furry Animals loose on the South Bank was, as singer Gruff Rhys admits, a "gamble". But as I wander through previously anonymous corners of the hall, now turned into figments of these Welsh underground figureheads' imaginations, it has patently paid off.

In the gaps between their three sets this evening, I walk into an "old man's pub", where gig-goers doggedly play shove-ha'penny and other antique games, winning them the only way the bewhiskered barmen will serve you their ale; then a boudoir, where scantily clad women transform me with glitter and paint, as if I have gone through some primitive ritual; then the smallest disco in the world. Many of the crowd around me are in fancy dress, part of the spectacle. What it most resembles is a Sixties happening, a counter-culture playground in which music is part of a bigger, brighter picture. The largesse is reflected in the price of the tickets; but still, it makes most gigs, and most other days in the Royal Festival Hall's history, seem timid and tame.

The Super Furry Animals have ignored the auditorium to play in the cavernous foyer, which immediately proves far more amenable to pop. They are in a largely mellow mood. "Ice Hockey Hair" glides by on Beach Boys harmonies and soaring guitars, which recall the generous warmth of Teenage Fanclub. For "She's Got Stars", the band slow behind Rhys, as if lazily wading through treacle, till the chorus kicks in. It is never exactly psychedelia, or the Ecstasy-aided dance music prevalent when the band formed 15 years ago. But the spirit of both movements, and of the Beat writers and Welsh history too, is in their DNA. While maintaining their status as a pop band, proven by the wealth of melodies and addictive hooks unfurled tonight, the Super Furry Animals also insist music is about more than commerce; that it can also unhinge and inspire.

In this spirit, they have invited San Francisco's underground veterans Deerhoof to play two sets in the gaps between theirs. The first thing I see here is two wooden arms clapping at the front, as if Pinocchio is in the crowd. The band ignore this surreal, inexplicable apparition to play their own form of avant-garde, pastoral psychedelia. Female bassist Satomi Matsuzaki's pretty voice makes them seem child-like and innocent even as they plough into discordant, jazz-thrash territory. It is controlled, mathematical chaos, eventually resolving into the sort of late-Sixties West Coast groove Jim Morrison might have danced to.

Refreshed, the Super Furries return with the appropriately titled "The Gift That Keeps Giving". "Show Your Hand" conjures harpsichord and bagpipe sounds from somewhere on stage, and a Slade-style seasonal flourish from the guitars. Rhys sings of "leaving troubles to one side", and this is music to make that easier.

A new song by guitarist Huw "Bunf" Bunford sees the crowd wiggling their fingers on their ears to aid "the separation of sound", while Rhys sings in a hillbilly keen, over the slow, low clang of guitar and drums. Then a techno pulse enters the music, before waves of light crash and warp against the walls.

This aside, there is little derangement in any of the three sets tonight. The songs just roll on easily, intended to comfort, not challenge. Even 1996's riotous "The Man Don't Give a Fuck" is merely playful. When everything around us has already been transformed into a bizarre play-pen, in which the Super Furries are the house-band, there's no need for them to try harder. They finish with their biggest hit, "Golden Retriever", then release us back into the real world.