Just when it looks as if Archaos and Cirque du Soleil have driven our native circus troupes from the ring, Dominic Cavendish drops in on rehearsals in Hoxton to see if a touch of Conspiracy can get New BritCirc off the ground.

You go across a puddle-logged courtyard, through a small black door in a faceless brick wall, and there, in the middle of the derelict combustion chamber of a former electricity-generating station, stand Britain's answer to Cirque du Soleil. A group of 10 people wearing scruffy casuals and knitted woolly headgear (the sort you could only show to close friends) are going through some very peculiar motions on a large mat. Three men are doing a spot of synchronised hopping in front of a TV screen, two more are rushing round with a cushion wedged between their heads, while another is balancing and flipping vinyl records on his nose. This is Day 1 of rehearsals for Conspiracy in the Circus Space. They open on Day 5 - this Friday.

Conspiracy do not easily stand comparison with that French-Canadian multinational company currently packing them in at the Royal Albert Hall. Most obviously, they don't employ 1,300 people, charge pounds 45 for a top-price ticket or have an annual turnover of more than $100m. Their entire budget for this coming weekend's show is a measly pounds 6,500 - mainly provided by Circus Space, the Islington-based centre for circus skills whose outhouse they are limbering up in and where they all trained.

But competitive glances are inevitable, given that Conspiracy are the most prominent contemporary British circus act to appear in this month's London International Mime Festival, which is running concurrently with Cirque du Soleil's raved-about Albert Hall Alegria. In the festival programme, they are even hailed as the front-runners of the new "BritCirc", a generational groundswell that could finally alter perceptions that our home-grown product begins and ends with Billy Smart, in the same way that Damon Albarn persuaded us that mockney didn't necessarily have to mean Bowie. The battle against FrancoCirc, which has enjoyed pre-eminence here since Archaos came over in the early Eighties to rewrite the rules using motorbikes and chain saws, may finally have begun.

"Cirque du Soleil are like a gorgeous box of chocolates," says Matt Costain, who set up Conspiracy in 1996 with Gaynor Derbyshire, like him a trapeze artist and (frustrated) actor. "You have to admire their high skill-levels, but ultimately I think the experience is unfulfilling. There is no reason for its existence. I want people to come away having felt something, and having seen something that relates to their everyday lives. We can't compete with Soleil in terms of size and scale and grandiose effects, but we can offer work that is true to itself."

While it's easy enough to provide an alternative to the slickness of a highly trained troupe with a rough-and-tumble approach based on relative inexperience, Conspiracy undeniably possess the street ethos that mega- companies like Soleil sprang from. Like their neighbourhood, the entrepreneurial melting-pot that centres on Hoxton Square, these British performers borrow freely from the different forms around them. One of the jugglers doubles up as an on-stage DJ, spinning the kind of discs you'd be likely to hear at the nearby Blue Note club (Metalheadz, Underworld). Another videos the action live, relaying it to a screen at the back.

Although dependent on whatever gadgets and skills they can get hold of, Costain has woven it all into a dramatic storyline, involving an X-Files- style mystery in which a woman goes on a quest to track down the "magical thing" that has blinded her.

"By including all these different ingredients, we're reflecting a holistic approach that many people seem very receptive to at the moment," he explains. "Certainly an art form that embraces the physical and the immediate, even the dangerous, as well as the thought-provoking, should thrive in the Nineties."

That there is a demand for circus as a spectacle at least is borne out by the ongoing popularity of foreign big-top visitors (the RAH's 4,300 capacity has been regularly filled during Alegria's run). But a report by the Policy Studies Institute, published this week, suggests that Conspiracy in the Circus Space - and other small- and medium-scale acts that have emerged over the past five years, such as the aerial dance duo Momentary Fusion and the Gandini Juggling Project - will continue to have an uphill struggle persuading anyone that New BritCirc is a contender. The report pinpoints funding as the problem, contrasting the national strategies of France, Canada and Australia, where subsidies and circus schools are the norm, with the UK's refusal to take circus seriously.

Charlie Holland, who set up Circus Space in 1987, agrees, citing the staggering statistic that only 0.0004 per cent of almost pounds 850m National Lottery capital awards had gone to circus by the end of last year. "People here seem to have the idea that you still run away to the circus. That's a bit like saying you run away to an orchestra and learn on the job."

You don't have to be a stat-analyst to see that bias in "real terms": nearly everyone practising in the draughty hall this week is on the dole, most having to choose between shopping-centre busking and more lucrative stints abroad to get paid work in the business. Like the rest of the company, John-Paul Zaccarini, a 27-year-old actor, dancer and aerialist, is holding on, sensing that a breakthrough is imminent. "There is so much energy in London at the moment. That stems in part from working on a shoestring. You need only one light to draw someone in, after all. We don't want loads of money, but it would be nice if we could afford the bulb." You don't have to be cautiously optimistic to work in the crazy world of BritCirc. But it helps.

`Conspiracy in the Circus Space' 8.30pm, Fri-Sun, Coronet St, London, N1. Tickets: pounds 9.50/ pounds 7.50 from 0171-613 4141