Contemporary dance and couture are such an obvious pairing, it's odd they haven't hitched up before. Clash of creative egos may be the reason. Models invariably mooch down the catwalk in a manner suggesting that a modicum of creative thought has gone into it, but that's a far cry from giving an art-dance choreographer with an established name the chance to doodle his or her own signature all over the clothes. It also takes an unusual leap of faith to ask dancers - who do not normally have the physiognomy of giraffes - to wear them. But this was precisely the idea behind Cut & Thrust, a one-off dance-cum-fashion show held at the Saatchi Gallery last week in order to raise funds for the revamping of The Place.

The Saatchis' vast white warehouse of an art gallery is an enticing space for performance, but live exhibits are currently up against stiff competition. Up one end of the space are three giant free-standing Michelin Man figures cast in shiny aluminium. Down the 100ft length of another wall are a dozen or more enormous photo-portraits of people looking like hopefuls for a job in a bank. For Cut & Thrust each choreographer had just five minutes to exploit this extraordinary backdrop, expound the spirit of the clothes, give a snapshot glimpse of his or her personal style and sell the idea of contemporary dance as the Next Big Thing. That the results were so clever, such fun, and so far from artistic compromise suggested that it already is.

Choreographer Lea Anderson (of Cholmondeleys fame) had landed a Rifat Ozbek trouser suit in crazy sequinned paisley. She sent her dancer on an insolent, hip-waggling stroll round the wall followed by a band of raucous buskers. When a portrait caught the girl's eye she would stop, stick out her bum and make a mad, rastafarian obeisance, raising her arms and arching her back. It was outrageously sexy. Shobana Jeyasingh made the best of a subdued grey top and skirt by Hussein Chalayan in an angular, South Indian-inspired duet which jabbed and sliced paths around the gallery's silvery statues as if they were gods in a temple. Javier de Frutos (more familiar to dance-goers in his birthday suit), clearly relished Bodymap's fake-fur trousers and matching coat, shimmying and mugging at the crowd in a hilarious speeded-up collage of catwalk manners.

But the showstealer was Wayne McGregor's savage little piece for New York City Ballet dancer Antonia Franceschi. She wore Julien MacDonald's translucent beaded body-hugger trimmed with trailing white fleece like a pony's mane. Pouting and snarling, poised on viciously spread-eagled pointes, McGregor's five-minute choreography was a whistle-stop safari of jungle-animal impressions, ending in Franceschi stalking off with the disdainful gait of an ostrich. It brought the house down, and later, when the clothes were auctioned off, a lady of mature years bid pounds 1200 for the couture. It's nice to think that The Place, in its art-house austerity, is to benefit from an outfit inspired by My Little Pony.

Another irony is that few, if any, of the smart set who made up Charles and Kay Saatchi's guest-list had ever set foot in London's shabby mecca of contemporary dance. And they still don't know quite what they're missing. The Place isn't just any old theatre in need of a facelift from Lottery money. It's the creative hub of what the Arts Council's audience audit shows to be our most burgeoning art form - the new rock n' roll. And at The Place you see it in the making. Go to the cafe and eat subsidised spuds alongside London Contemporary Dance students; go to the ladies and there's leotards drying on the hot pipes, go to the bar and it's also the barre.

The other draw is that for 32 weeks of the year, The Place offers cutting- edge live performance for less than the cost of a cinema ticket. During the recent Dance Umbrella performances you had to fight for a seat even to see small foreign companies no one had heard of. Last week's sold-out dates for Belgium's Compagnie Tandem were a case in point. The blurb yielded only the obscure fact that Michele Noiret's work Les Plis de la nuit was inspired by engravings. Hmm. But it turned out to be a virtuoso study of everyday street movement (folding arms, stuffing hands in pockets, shifting weight while waiting in a queue) that captured precisely our modern-day wariness of unfamiliar human contact, spinning mesmerising sequences from almost nothing. In semi-darkness three rough-looking shave-heads and two inscrutable girls in street gear told a compelling tale of urban angst that could have found its expression in no other form. Whether shabby or smart, The Place is the place of the moment. The contemporary dance fans' secret is out.

The Place, WC1 (0171 387 0031).