Red alert: Nicole Kidman last year in ultra-glam Balenciaga © Getty Images
It's the awards season, when the neurotic worlds of film and fashion collide. Here, Hollywood insiders Ruthanna Hopper and Amanda Goldberg offer an eye-popping insight into the orgy of vanity and greed that inevitably ensues

The awards ceremony season is a time when fashion and film come together in front of the eyes of the world. As both can be quite mad at the best of times, this is Hollywood at its most outlandish. As the red carpets unfurl, everything becomes heightened and it brings out the best and worst in people. Whether or not the Oscars take place this year (still to be decided at the time of going to press, owing to the writers' strike), the frenzy is still going on, full-steam.

The amount of money at stake is now so enormous that things have become cut-throat: awards ceremonies can make or break a label and designers would stab out each others' eyes with their stilettos to get a Hollywood star into one of their dresses. You only have to look at the example of Zac Posen to see the reason why: having Gwyneth Paltrow walk down the red carpet in one of his creations turned him into a household name overnight. These days the dress is as important, if not more so, than the prize itself and because there are now so many awards shows – from the Screen Actors Guild to the Directors Guild – the stars have the designers at their beck and call.

There's an old joke that when Diane Keaton was nominated for an Oscar for 1977's Annie Hall she borrowed her brother's suit and drove herself to the ceremony. And in 1985, when Sally Field won an Oscar for Places in the Heart, it's said that she popped into Macy's, chose something off the rack, applied a little mascara and lipstick and headed out to the ceremony. But such tales would be unheard of today, as designers court, bribe and sketch months in advance, trying to get the stars to lock into their label.

A friend of ours who worked for Isaac Mizrahi spent months trying to get Helen Hunt into one of his dresses when she was nominated for As Good As it Gets in 1997. They were so excited at the prospect of seeing her in it on the red carpet that they organised a special Oscar-night screening and invited everyone over to watch. Lo and behold, Hunt changed her mind at the last minute and turned up in Gucci. The devastation that night was incredible. It was on a par with Sharon Stone opting for a $15 Gap turtleneck T-shirt at the 1996 Academy Awards. A statement, maybe, but the behind-the-scenes fallout was unimaginable. It used to be that designers issued press releases announcing which celebrities were going to be seen in their dresses. Not so any more: there have been too many upsets, because every star has the right to change their mind on a whim at the 11th hour.

Drawing on our first-hand experience of this town, we decided things had reached such a level of insanity that it was time to satirise it in a book. Celebutantes is fictionalised but the characters in it are all entirely based on fact. There really is an actress who disappeared for a boob-job between fittings for a red-carpet gown and, on her return, said she had been doing charity work for a sick child, completely skirting over the issue of why the dress now failed to fit. The young Hollywood starlet who stripped butt-naked in a room full of people to shave her bikini line, using a razor wetted with Diet Coke, is also real enough. And the number of pee or poop moments, courtesy of star's precious little dogs, are too countless to mention. Nobody reaches to do anything. It's as if it hasn't happened until a minion steps forward to silently wipe it away. It is little wonder that in the writing process, our editor had to ask us to tone it down as she couldn't believe people actually behave like that.

Some actors are so disconnected from reality that they refer to themselves only in the third person; others won't even shake your hand for fear of contracting germs. Terrifyingly, it is around these people that a whole industry has sprung up that will do anything to pander to them. If it means custom-making a fur-trimmed cashmere sweater for their dog, or entirely re-making a designer dress hours before an awards ceremony in a shade slightly darker, so be it.

During Oscar wee there is a party to be seen at every night, and whether it's the Gagosian dinner at Mr Chow's or the party thrown by agent Ed La Motta (who is famously so horribly selective he doesn't invite certain people from his own agency), you need a different outfit for each. A knock-on effect is that the freebie culture has gone crazy. The energy of excess is in full effect: "gifting" suites are set up to dish out shoes, bags, clothes and jewellery to the stars. Last year, one such suite even issued a colour-coded bracelet, which told you whether there was a limit on what you could take or whether you could help yourself to anything. It also told you exactly where you fell in the Hollywood food chain.

A friend of ours who has just got back from the Sundance Festival told us that the event's tagline might as well now be "No picture, no product". Which basically means that if there's not going to be a picture of you hawking round your free Gucci bag, you're simply not getting your free Gucci bag. It's become that much of a business exchange. Hilariously, the IRS (Internal Revenue Service) has now caught wind of all this excess and is taxing celebrities on the immense number of freebies they accumulate.

The other obsession at Oscar week is the Vanity Fair party. The editor, Graydon Carter, and his team sets up a bungalow in the Beverly Hills Hotel a week before the ceremony. It's like a war room. Agents bombard them with faxes, resumés, headshots, letters of recommendation and gifts to try to persuade them to let their clients in. People become obsessed with whether they'll get an invite and what their time slot is. The 5.30pm invite is the most coveted slot: you get to go for dinner and watch the ceremony on plasma screens. This means you are top of the pecking order. If you get a ticket for around midnight, you're on the periphery. And if you're someone's other half, forget it: being someone's partner definitely isn't enough. It's questionable how appealing a ticket to a party at midnight all on your own actually is, but that is the thing about these ceremonies, they let you know your place – either you're in or you're out.

The whole thing has lost a little of its mystique as the level of access we get to celebrities has become unprecedented – especially those with Career Deficit Disorder. These are the children of the massively successful, living in the shadow of their parents' fame – they can't figure out what to do, have no financial need to do anything and end up becoming famous for little more than a sex tape. A new term has even been coined for them – the celebutard, amalgamating the words celebrity and retard – which is applied to those who go around flashing the paparazzi with their naked noonies.

The entourage also features very heavily in Hollywood. A friend once told us about a meeting they went to with a famous client; all of his handlers – the publicist, the agent, the manager, the AA sponsor etc – got to the room ahead of time to spend ages playing musical chairs, trying to work out who should sit where to make the star feel most comfortable. The level of attention to detail has become quite mad.

No wonder, then, that the celebrities who do their own thing from a fashion standpoint are few and far between. With this level of mollycoddling, they no longer need a mind of their own. There are some, though. Nicole Kidman is always very much on the fashion forefront, as is Jennifer Connelly, who is the face of Balenciaga. The Olsen twins certainly have their own look and both Angelina Jolie and Kate Bosworth seem to support new designers. But they do so at their peril. Stars get absolutely butchered by the fashion commentators when they get it wrong.

The movies were founded on great artistic talent, and it would be great if that became the main focus again. But in the meantime, spare a thought for all those designers, stylists and minions watching the Oscars with bated breath. Not to see who wins the prizes, of course – just to see whether their months of delicate negotiations pay off.

'Celebutantes' by Ruthanna Hopper and Amanda Goldberg (Orion, £6.99) is published in paperback on 21 February

Ruthanna Hopper is the daughter of the actor Dennis Hopper. Amanda Goldberg is the daughter of Leonard Goldberg, the former president of 20th Century Fox