'COME on, Phoebe, the taxi's downstairs,' I said. She emerged from the bathroom hitching up her tights, wearing the look of a woman on Death Row. Five years old and bored with nightlife? Too bad. I belted her into the back seat and we were off to the old Shoreditch Town Hall in east London and Whirl-Y-Gig, a club night that has become an institution.

The queue, about 300 people, stretched halfway round the block. Phoebe was quick to point out it was far too cold to stand around, doubtless hoping we might return home immediately. But even before I could request preferential treatment we were ushered through, with the assurance that children always get priority.

Upstairs, on a packed dance floor, large orange balloons floated over the dancers' heads. Every area of the hall was draped with fabric and lit with intricate, swirling psychedelic patterns, creating an impression somewhere between a hippie grotto and Aladdin's cave. At the back of the room, people sat cross-legged, sipping soft drinks. A loud, clean PA system pumped funky techno through the building. 'What do you think?' I asked Phoebe.

'It's very weird,' she said. 'And very noisy.' I looked in vain for other children for her to play with. A man sitting in front of me seemed to read my mind. 'Come back to this table in an hour,' he shouted. 'There'll be some more kids of her age.'

Whirl-Y-Gig started 11 years ago as a monthly event 'for about 100 people' at Islington's Almeida Theatre. It moved to its present home in 1990 and has thrived ever since. Doors open at 8pm and close as soon as the place has reached its 1,200 capacity, around 10pm. Officially, it finishes at midnight: a brief event, but intense.

Despite its nomadic nature, and regardless of the vagaries of fashion, it has retained its idealistic principles. Exhilarating dance music, friendly atmosphere, lots of young people to give the place energy, plenty of wise old heads directing it towards a peaceful end.

There is no alcohol on sale, although people can bring drinks with them. Cheap, nutritious food is always available. The music, lighting and decor are carefully chosen and designed to create 'an uplifting experience'. Children are welcomed, but under-18s must be accompanied by a parent. 'A rave for all the family,' is one regular's description.

'Music and people of all ages and places' is how it bills itself on the flyer, though the crowd's average age must be early twenties. 'But we have several regular customers who are senior citizens,' says the DJ Monkey Pilot, aka Richard. He and his partner, Mary, are the driving force behind Whirl-Y-Gig.

Richard started running the club after becoming involved with the Association of Humanistic Psychology, a New Age umbrella organisation, whose common ideal was to put people before systems. 'And that's the basis for the club,' he says. 'The audience is the most important part of the experience.' A former nurse and medical tutor, Mary grew disillusioned with the politics of health care. 'With Whirl-Y-Gig I'm using everything I've ever learnt, all my skills, and I'm developing new ones, too,' she says.

Together, they have built a unique experience in nightlife. 'A bubble of positivity,' is their description. Hopelessly idealistic? 'No, because it is also an acknowledgement of the negativity that surrounds us at all times.' Mary feels the club is only just beginning to realise its potential. 'If you set out to create a more positive world, where people are happy and treat each other with respect, and things look and sound beautiful, it's just a question of imagination - how good can it get?' She and Richard 'get a real kick' out of the club: 'When it comes off, it's like creating magic.'

Every week, Whirl-Y-Gig ends with the 'parachute dance'. At midnight, a large silk 'chute is dragged over the heads of the dancers as the music becomes softer, gentler. The 'chute is billowed up and down, cooling those underneath, who slowly sit on the floor. The psychedelic lights are directed on to it, creating a giant, multicoloured screen. Everybody emerges smiling.

'This is a lifetime's commitment,' said Mary, watching the crowd disappear into a frosty night. 'It's our family, really.' At which point I realised that a large part of mine was falling asleep on my lap, and left.