They do drugs. They have sex. They're the child stars of a new film. From Disney. Daniel Jeffreys met them

Harmony Korine imagines himself on a skateboard, hitting the curb in New York's Washington Square with a full speed flip and soaring into the sky, never coming down. This kid is high on himself, this new Tarantino, this fresh-freshed cog on Hollywood's production line. "I've always wanted to make my own films," he told a press conference at the Cannes film festival. "I'm going to make movies like nobody has ever seen before."

Kids is Korine's opening bid for immortality. He wrote the screenplay in three weeks, working with the photographer Larry Clark, who directed the film. Kids will be released in New York on July 21. The movie is already controversial. It's been shown to the press at the Cannes festival, at Sundance and in New York. Critical opinion is mixed, but almost everybody accepts that Kids is deeply shocking, in part because it presents itself as a slice of life. Look, it shouts - this is how big-city kids live now.

The action takes place on one day in the middle of a hot Manhattan summer. The movie begins with teenage sex, there's sex in the middle and at the end. In between there's drugs, alcohol and violence mixed with skateboarding. The central character of Kids is Telly who will only have sex with virgins. He's a self-proclaimed "virgin-surgeon". It's Telly's seduction of a girl who looks barely pubescent that forms scene one of the film. After his triumph, Telly leaves quickly. Before a minute has passed his best friend Casper has all the details.

Telly thinks his choice of partners will keep him safe from AIDS and leave him free to have unprotected intercourse. Good logic, bad premise. Unknown to him, Telly is already HIV positive when the film begins. Each broken hymen is another broken heart, a life shattered. Telly only finds out after one of his conquests tests HIV-positive. She seeks him out, there he is, at a party, in the bathroom, having sex with another virgin. In the living room kids sprawl around dead-drunk, many without their clothes.

"I'd say it's pretty accurate." Gaby is 17, she says her friend Ali has a small part in the film. Gaby and Gillian are hanging-out at Astor Place on a hot afternoon in June. "Harmony and his crew used to cruise through here," says Gillian. "They were pretty cool."

Gillian and Gaby attend Columbia Prep, one of New York's most expensive private schools. A large segment of the cast in Kids seem to have a similar background, although many don't. The area around Astor Place and Washington Park is mixed. Million dollar brownstones can be a stone's throw from a large public housing project. Hanging out on the streets is a democracy, currency is often measured in style.

"There are a lot of drugs," Gaby says. "Heroin is the thing right now - oh, and Special K." Special K is a heroin-based hallucinatory drug popular at parties. "I reckon it's easier to get heroin than almost anything else," says Gillian. "Ali, she's in the movie, she used to take Special K at school. She would be so whacked out, like man." "I've been to orgies," says Gaby. "In my younger days." Gaby say she lost her virginity when she was 14, Gillian reckons she may have been 15. "Once you're out on the street there's basically everything available." She leans against Gillian, who is now 17. "We're tired of it now, the club scene. All we do now is, like, hang-out."

In Kids, sex is usually unprotected. This seems to be a theme of Korine and Clark, a warning that New York's sexual neophytes are planting viral time bombs. "We try not to go unprotected," says Gillian. "But you know, sometimes it just happens." Gaby has already had two AIDS tests. "Just to be safe, but I can't remember the last time I had sex." Gillian laughs and blushes. "I just have a steady boyfriend now. He's pretty clean and we don't always use a condom." Did she interrogate him about his past? "Sure and some of his exs were sleazes, but you know."

Five blocks away is skateboard central, the fringes of Tompkins Square, the Lower East Side. On Ninth Street, Harry, Joe and Hamilton are opening a new store to sell boards. Hamilton appears in two scenes from Kids. "I feel blessed man," he says. "Harmony and Clark came along and 'boom', my life's there in film. It's all true, pretty much. Everybody in the movie are people I hang with, except Telly. He was like an outsider, I guess they brought him in for his look. He's, like, a little extreme."

What about the drugs, the sex. "Ain't no big deal, if that's what's there," he muses. "We don't do too much heroin, that's more the rich white kids. But we smoke a little weed, drink some beer. People always like to get high." Hamilton's parents don't figure much in this equation. "Nah man, they like have too many life concerns, ya know what I mean. They like sort of gave up. Both my mom and my dad, they work. It ain't no party for them, they don't have much time or energy to be running around with a whip hand." This is a common observation. Rich or poor, New York parents work hard for too many hours to be effective parents.

Hamilton agrees that drugs are everywhere in New York City, that a teenager with inclination and a little money can get anything. "That's when the sex thing starts man, that's when a lot of people get loose and you can't be doing that at home. You got to go to somebody's place. If you are all there together it's going to look bad but it ain't really. We just take sex for granted."

All of this and more is there in Kids. The movie is currently a Miramax property and has not yet been rated. Some right-wing critics have said the movie is kiddie-porn. Clark and Korine have countered that all the actors were over 18. They were also impressionable. Except for Telly all of them were drawn from the streets of New York's Lower East Side. Gaby says her friend Ali played her part for $50, which she used to buy Ecstasy. All of this would be less important if Miramax weren't owned by Disney and if Clark had not shot Kids so you forget you're watching a movie. There's barely a moment in the film when it doesn't feel true. And this is Disney, and this is about underage sex and drugs. What on earth will Bob Dole think? That's why it still hasn't been decided who will distribute Kids, which Larry Clark says he made to "go against all that Hollywood bullshit" when it comes to presenting the lives of American children.

According to the Disney contract with Miramax, the parent company is not obliged to distribute anything which gets worse than an R rating, the equivalent of an 18 in the UK. Disney is still reeling from the crticism of Priest, the Miramax film about homosexuality in the Catholic church which brought howls of protest from Senator Dole. Miramax say they are "completely" behind the film and will form a separate company to distribute Kids if necessary.

Which would be a shame, as the audience would then be smaller. Kids should be seen by everybody, especially parents. The movie's brilliance is that it captures the candy store when all the adults leave, when the kids are left with the keys. And it's not just New York. Teenagers in cities like Baltimore, Seattle, Boston and Chicago say the same. They can have sex, drugs and lots besides but they can't count on a moment of their parent's time.

Back at Astor Place, skateboards are flying. A young man sails three feet above his board until gravity takes over and he makes a perfect landing. The peak of his cap curves tight over hooded eyes. One has sneakers with "BURN" written down the side. Earlier he said he takes drugs, lots of them. "I started with weed, my mom used to score. But since I was 14, its been 'phets and a little gas." That's amphetamines and nitrous oxide. "Getting high is part of the freedom," he said. "Skateboarding is about breaking boundaries, defying gravity. When you're high it takes away the fear."

Larry Clark started taking amphetamines when he was 16, Harmony Korine's first drug use is undocumented. Now Larry is 52 and Harmony is 21. Larry is a Hollywood director and Harmony is a writer. Larry's early life as a "thieving drug fiend" was documented in Drugstore Cowboy, now he's returning the favour to Korine. In Kids, the young teenagers seem much less confident than the Clark of Drugstore Cowboy, but this is a different age. Take Hamilton. He says he likes Larry Clark but thinks he may be too structured to really understand him and his friends, maybe even his generation. "Look man," he says. "It's just life, it don't necessarily go anywhere."