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Music: This is more like it, Royal Opera!

Of all the great relationships that never happened, few are so fascinating as a near-miss in the 1930s between two men who respectively became the leading English poet and composer of their time. The poet was Auden, who did all the running. The composer was Britten, who held back. And the evidence of what was going on survives in Auden's "Lay your sleeping head my love", which he scribbled down for Britten at a teatime assignation in a Lyons Corner House. Such was romance in pre-war London. Innocent but keen.

In 1939, Auden emigrated to America. Britten followed. And they ended up together in a legendary household, 7 Middagh St, New York, whose other residents included Christopher Isherwood, Gypsy Rose Lee, and Britten's new, enduring lover, Peter Pears. Pears found it "unimaginably sordid", and eventually the two musicians packed their bags. But not before the professional, collaborative involvement between Britten and Auden - which had begun with documentaries for the GPO Film Unit and progressed through two song cycles - peaked in Paul Bunyan: Britten's first attempt at opera, and a "problem" piece which has never had a professional London staging until this week, when the Royal Opera opened a new Francesca Zambello production at the Shaftesbury Theatre.

Bunyan is in truth an operetta, written with an eye on Broadway, for a modest orchestra and cast of actor-singers - although its 1941 premiere was given by students at Columbia University. It draws eclectically on a wide range of precedents, from English 18th-century ballad opera through Kurt Weill to American jazz. And its theme - the Minnesota myth of the giant logger who created modern America - is bent in all directions to become a repository for whatever exercised the minds of the composer and librettist at that moment. On the one hand, it's a moist-eyed celebration of the New World by two hopeful young arrivals at the door: a piece that falls conceptually and chronologically between Weill's Johnny Johnson and his later Love Life. On the other hand, it's a distinctly dry-eyed evaluation of what role there might be for creative artists in a still- developing society whose priorities are practical (one leading role in Bunyan, Johnny Inkslinger, is pretty obviously an Auden-Britten composite). And the self-reference gets still more personal in scenes that parody domestic life in Middagh St - not least a clever little number in which two cooks, Sam (Wystan?) and Benny (obvious enough) extol the benefits of a relentless diet of soup and beans.

But the very cleverness of Bunyan is itself a problem. The sheer virtuosity of Auden's text runs riot, without regard for whether it gets heard. The episodic storytelling - broken into disconnected speech/song units with no real dramatic follow-through - is awkward. And the absence of a central character on stage (as Bunyan is a giant, you never see him: you just hear his voice) leaves a sort of void, a sense of missing substance which the parodic playfulness of Britten's music doesn't quite fill.

So much for the weaknesses. The strengths are that it's funny, brilliant, touching, and awash with memorable melody. I've loved it dearly since I saw it semi-staged some years ago at Aldeburgh by the American cast who appear on the one and only Virgin Classics recording. And I utterly adore this new show.

It's done cheaply, and there's no disguising that: the set is basic. But Hildegard Bechtler's response to a zero design budget is comparatively stylish; and Bunyan is in any case a piece that would be smothered by too sumptuous a packaging. Francesca Zambello's track record for gutsy showmanship (remember her Covent Garden Billy Budd, her Earls Court Tosca?) lives on in a bold, big-gestured manner that cuts through the less manageable eccentricities of Auden's text. And although that involves some dilution of imagery - in, for example, the opening chorus which is meant to be a group of trees(!) arguing the merits of progress, but becomes merely a historic pageant of the chattering classes - I can understand why she does it.

The cast is largely British, which means dubious mid-Western accents, and the diction could collectively be better (it takes a lot of work to make Auden's jokes register). But there's a real company spirit in this show, which lives up to Britten's expectation of a good, strong chorus and a quick turnover of characterful cameos. Susan Gritton steals all hearts as Bunyan's daughter Tiny. Peter Coleman-Wright negotiates the potential banalities of the ballad-singing Narrator with panache. Kenneth Cranham speaks the offstage words of Bunyan with the all-American gravitas of an inaugural address. And there are two small but show-stopping routines from the telegraph boy, Henry Moss - a newcomer whose comic talents I flagged in this column a few weeks ago.

Altogether, this is exactly what the Royal Opera should be doing in its current, straitened circumstances; and it has exactly the right conductor in Richard Hickox, whose sympathetic but unsentimental reading of the score touches its inner nerve. Mine too. The real star here, though, is the piece itself: endlessly fascinating in the way it begs and equally resists comparison with other stage works of its time. It also reads like an ideas book for so much that was to follow in Britten's own career, from the chorus-writing in Peter Grimes to the voice of God in Noyes Fludde. And if nothing else, it writes large the capacity Britten revealed in his cabaret songs for letting down a bit of hair. As someone (Michael Berkeley) said to me on Wednesday: "With a piece, he could have been a popular composer." Too damn right.

Britten's "popularity" largely resides in his work for children. Its disarming synthesis of innocence and sophistication has often been imitated, never bettered; and certainly not in the new children's opera Joe Carpenter & Son, which premiered at Rochester last weekend. I was drawn to it by the involvement of two of the old Britten crowd, the baritone Benjamin Luxon (who directed) and the harpist Osian Ellis (who appeared with an ensemble of distinguished players, moonlighting as the Brandenburg Ensemble). But it wasn't good. Ken Roberts's score was unmemorable in a breezy West End way; and Graham Clarke's rewrite of the Nativity in rhyming couplets was, at best, cute. In the dismal chill of Rochester Cathedral it was little comfort. Less joy.

'Bunyan', Shaftesbury, W1 (0171 304 4000) Mon & Wed; King's Lynn Corn Exchange (01553 764864) Fri & Sat.