As Jeanette Winterson once observed, it's dislocation that makes us laugh: something expected in an unexpected place - your favourite aunt in a poker parlour. Or the reverse: something unexpected in an expected place - a poker in your favourite aunt. If theatre is (wrongly) regarded as a place of "high cultural value", opera, despite its reputation for excess, is believed to be the domain of artistic piety to the point of transfiguration. So where does comic opera fit in?

The chief problem is that comic opera is usually often nothing of the sort. Many's the time I've witnessed preposterously poor stage business being greeted by guffaws from the stalls. Visual gags that would barely raise a titter in the theatre will be met with delighted laughter in an opera house. Why? Relief: half the audience are only there out of cultural duty and expect to be bored rigid so when something vaguely amusing pops up they fall over with surprise.

The latest revival of Xerxes, however, proves that it doesn't have to be like that. Nicholas Hytner's scintillating ENO production of this great Handel opera may not induce heart attacks brought on by fits of hysteria, but the entire evening is graced with wit undimmed by the passage of time since this English-language production first appeared to celebrate Handel's tercentenary in 1985.

Here the audience laughs not because they've just read an unexpectedly rude word in the surtitles (a sure-fire way to get a laugh at Covent Garden) but because the show is genuinely funny. That's partly the plot - disguised Amastris loves Xerxes the king who loves Romilda who loves Arsamenes (the king's brother) who is also being chased by Romilda's sister Atalanta - but more than that, the humour and considerable pathos derive from the seriousness and dramatic intelligence brought to it by director and cast. Neither they nor the audience need to leave their brains at home.

As Atalanta, Susan Gritton is a quick-witted, deliciously scheming minx whose perfectly placed singing is one of the evening's many pleasures. Sarah Connolly's Xerxes lacks the sheer dramatic power of Ann Murray, who created the role, but the warmth and control of her voice are enormously impressive. But the real reason to rush to this production is Janis Kelly as the singer Romilda.

Singing Handel in English is not only a test of technical accomplishment (which she passes with flying colours), it poses huge dramatic problems, as most arias repeat the same few words endlessly. From the moment Kelly appears adopting a winningly arch "opera singer" guise, you know you are in safe hands. At all other times, she takes you deeper and deeper into the character. Her five-minute aria about the need for love to withstand fortune and fate that closes Act Two is beautifully sung but more importantly, her thoughts develop throughout it. At the end she repeats the opening phrase but it feels fresh and surprising. She takes you on a real dramatic journey.

So much for the received wisdom that singers cannot act.

Hytner's production, bolstered by David Fielding's witty sets and costumes, reminds you that Handel knew what he was doing when he set his texts. Opera belongs not on CDs with merely mellifluous singing, but in the theatre.

`Xerxes' is at the London Coliseum, WC2 (0171-632 8300) on 20, 23, 28 Feb, 4 & 6 Mar