AS ALWAYS, the Cassandras have been crying doom: doom to Raymond Gubbay and his overblown money-raking extravaganzas. The sound system would fail, half the audience wouldn't be able to see, and it was odds- on that the plastic liner which houses the 15,000-gallon Japanese water- garden would spring a leak. But no, the new Albert Hall Madam Butterfly in-the-round has pulled it off, technically (certainly), dramatically (for the most part), and musically, give or take the odd minor glitch, like when a chorus entering through Stalls K came in singing slightly sharp of those entering 100 yards away through Stalls C. But I can live with that.

This is not the first time Gubbay has brought fully-staged opera to this uniquely cavernous space, but Butterfly is the first to use the entire arena, with the orchestra ranged offstage, Proms-style. I wonder how long it took to persuade conductor Peter Robinson to take on a job in which his back is permanently turned to the action. Half a dozen discreet monitor- screens relay his beat to the soloists, but I spotted no such aids for him. Yet the BBC Concert Orchestra acquitted itself in grand style. The softly glimmering textures of Butterfly's vigil-music descended like dew; the massive brass fortissimos at the close of Act II all but rattled the rails of the gallery.

David Roger's aquatic set is pretty as a Hokusai print: pale duckboard walkways criss-cross four sparkling blue ponds filled, for Act I, with a foot of water; for Act II, drained dry to expose hard grey rock, a marker for the abandoned wife's hopes. Cio-Cio-San's house is a skeletal structure of pink timber, so that its inhabitants can be viewed from 360 degrees. Even so, masking is a problem. I gave up counting the number of times a protagonist began to sing when hidden by a door jamb. But my loss was always someone else's gain. More avoidably, the naturalistic acting style encouraged by director David Freeman means that characters do not announce with their bodies that they're about to sing. Without the focus of a proscenium, and with that slight disembodied effect that comes of amplifying (sorry, enhancing) the voices, it can take several seconds on a crowded stage to work out who's singing.

I had expected to hate the electronic manipulation of sound, but with no visible mikes or wires, it's so discreet you might not know it's there. The major difference it makes is that every single word of Amanda Holden's fine and easy new translation can be heard (and normally I reckon even opera in English needs subtitles). Here, for once, the subtler aspects of Pinkerton and Butterfly's cultural incompatibility are made plain by the libretto. What's more, in defiance of all those who scorn attempts to stage "people's opera" on this scale, Freeman's detailed and gimmick- free direction creates a cumulative dramatic tension that not only speaks to the back of the balcony but survives the most intimate scrutiny too.

Royal Albert Hall, SW7 (0171 838 3104), to Sun 1 Mar; Birmingham National Indoor Arena (0121 200 2222), 6 & 7 Mar.