Welcome to the all-American world of Militia Men and ufologists, of a self-proclaimed Antichrist, the wonderfully-named Centre for Celestial Christianity, and the man who invented the microwave oven. Welcome to The Entire History of the Louisiana Purchase.

This is Joshua Oppenheimer's dazzling and slightly doolally fake documentary in which the film-maker explores the strange case of Mary Ann Ward, a young woman who microwaved her baby, claiming it was the offspring of an alien impregnation. Oppenheimer uses the Mary Ann story as the jumping- off point for a kaleidoscopic tour of the popular American imagination.

Oppenheimer, who studied film at Harvard, explains his fascination with the fringes of the American cult mentality as going back a long way. "I come from New Mexico, near Los Alamos, where they built the atomic bomb," he says, adding that he has always felt "haunted by the end of the world in my everyday life".

It appears that even his move to London has not exorcised the ghosts. Louisiana Purchase provocatively mixes documentary with fiction, reconstruction with straight interviews, poetic sequences with Fifties American education films. Oppenheimer calls the Mary Ann Ward story "an inevitable part of the social landscape".

He adds with pleasure that a London listings magazine's review took it for granted that the story was a matter of historical fact - it's nothing of the sort - "which is fabulous, because the film is all about a kind of rewriting of history".

It does have the ring of being an all-too-plausible falsehood. It is this conceptual wager that Oppenheimer's film is based around - the idea that Mary Ann Ward, although imagined, is "true" enough, as fiction, to have persuaded the various assorted fringe-dwellers to participate in the film and offer their perspectives on the case.

In the great American huckster tradition, these guys know the entertainment value of a good lie. So we are presented with the charismatic militiaman Edward Brown, who talks as though he is straight out of a Don Delillo narrative detour. "You gonna fight the government?" he snaps, "Try it. Good luck." The words are delivered as though he's been saying them to the bathroom mirror every morning for years.

Then the Self-Proclaimed Antichrist of Las Vegas appears, blond rock- god locks flowing, and offers his take on the story. "The whole scenario to the Mary Ann Ward case is the Apocalypse. And we all know who the Four Horsemen of the Apocalypse are ..."

There's barely a pause. You know that this has got to be good. "They're the Beatles."

The spiralling insanity of the (ir)rationalisations soon palls. You begin to forget about alien abductions and delusional psycho God-botherers, and to observe tics, domestic arrangements, something human beneath all the hysterical fantasising. The Self-Proclaimed Antichrist lives at home with his mum - of course he does - and this personification of maternal devotion says simply, of her satanic offspring, "I think he flipped."

The great thing about all this is not that you couldn't make it up, or that even if you did it would have the ring of truth, but that Oppenheimer treats the stories like one vast, collectively-hallucinated fiction - one that simply never stops proliferating and that, with viral adaptability, absorbs all its counter-arguments within it, feeding on them and becoming stronger and madder still.

Oppenheimer says: "I think it's always been this way. History has always been a catastrophe, looking all the way back. People have said that the film is quite bleak, but to paint a bleak picture of history is in itself an act of optimism, in that it implies anger with the status quo."

There remains something a little too comfortable about Brits laughing at the mad Yanks, as if we, following the mania around Princess Diana's death, possess any kind of collective sanity. It's something Oppenheimer is keenly aware of.

He's about to start shooting his next film, which he describes as a "companion piece" to Louisiana Purchase, provisionally entitled Sweetmeats.

It ties in CJD, Rose and Fred West, and cake-decorating contests in the London suburbs "as a means of painting a portrait of a contemporary social landscape through seemingly fringe events", Oppenheimer explains, clearly having found England as fertile a ground for paranoia as he did the US.

`The Entire History of the Louisiana Purchase', 26 March, Brighton Media Centre (01273 7399 70).