A cartoon for kids where Gorillaz meets 'The Matrix'

It is hard to imagine Bafta and Tony award-winning actor Ralph Fiennes begging for a part in a children's animation about pop music, teen bands and record labels, but apparently he was keen to take any role going in Freefonix, one of the most important commissions in the history of the CBBC channel.

As it happens, the series creator is one Magnus Fiennes, Ralph's younger brother. It was Magnus who decided there were no suitable parts available, but instead wrote an episode around his other well-known actor sibling, Joseph.

Freefonix has been quietly climbing the ratings ladder since it began back in January, and is now second only to Scooby Doo in the children's animation ratings with a healthy half million or more viewers for each episode. It stands out as something as an oddity in the schedule, though, as it is a music programme designed for children.

The show is aimed at seven-to 11-year-olds, an age group that has outgrown nursery rhymes but hasn't quite started to develop its own music tastes. Despite the assumed musical naiveté of its core audience, Freefonix presents – in cartoon format – the cut-throat world of the music industry warts 'n' all, set against a mysterious sci-fi underworld. "The simplest elevator pitch for me," explains Fiennes, "is Gorillaz meets The Matrix. It is an animated cartoon about bands, but with a big mythic element to the back story."

Magnus Fiennes' day job, until now, has been producing and composing music; he produced All Saints' blockbuster single 'Never Ever' and has worked with Massive Attack, Morcheeba, Lenny Kravitz and Pulp and scored a host of films and television programmes. Around the turn of the century, Fiennes hit upon the idea of creating a virtual band but, as we know now, Damon Albarn got there first with Gorillaz.

So Freefonix is a vehicle for various virtual bands and musicians, as well as a virtual record label. It is also a parable about the dangers of corporatism and the pitfalls of not investing enough money or energy in the creative process – issues probably even more relevant today than when Fiennes first thought of having a dig at them.

"There are lots of levels to the story," he says. "It's set in a futuristic world in the big, shiny city of the future; where the sun always shines and you can buy whatever you want, what Noam Chomsky called 'manufactured contentment'. But beneath that it's much more pernicious. A conglomerate called ComaCo run everything, and the kids who rebel and don't want to buy into the ComaCo way of things are called Freewavers. They're independent thinkers and they make their own music."

Joseph has voiced the character of Calos, a nomadic instrument builder and champion of independent music who enters the Freefonix universe and sets its inhabitants a host of musical challenges. Calos's opposite number is Kurtz, the lead singer of the world's most evil rock band, Mantis, and played by Justin Hawkins of The Darkness fame.

Despite the wealth of ludicrous rock icons Fiennes could have drawn upon for this character, he chose Hawkins for his sense of humour. "There's a great sense of tongue-in-cheekness with all he does, whether it's the fastest guitar solo, the highest singing or the most Queen-esque blocks of vocal harmony, and all were very much within his talent range," says Fiennes.

One thing he wanted to avoid was writing music which was "patronisingly kids' music". His two daughters, aged nine and 11, who he has used as sounding boards for the show every step of the way, listen to anything from Arcade Fire to AC/DC through to David Bowie. Children without music-loving parents are unlikely to be exposed to such broad musical influences at home, so Freefonix might just plug this gap. As well as rocker Hawkins, Fiennes has enlisted R&B singer Jamelia to play Sugar Che, the fairy godmother, or guru, to Freefonix, the name of the band of Freewavers who try and make it in the music biz without the support of a record label.

Fiennes describes Sugar Che as a kind of Yoda-ish figure. It is clear he has been able to indulge all sorts of childhood fantasies in the making of the show, and used his experiences as a "hired gun" in the music industry. In one episode a Freefonix singer is locked into a contract with ComaCo and forced to record a song called 'My New Pink Sweater'. "Even the name 'Freefonix' is a bit cheeky in the days of illegal downloads," he points out. "It's about the energy of doing it for the music, and not feeling you have to contrive what you do or bow to commercial pressure when it comes to making music."

Freefonix launched in January, just weeks after a reported "crisis" in children's programming: ITV announced it was to halt spending on children's programming, and the Department for Culture, Media & Sport said it believed children's programming should be eligible for funding to plug this gap. CBBC, left as one of the few broadcasters producing new children's shows in any volume, was also facing cutbacks but, fortuitously for Magnus Fiennes and his team, Freefonix had been commissioned several years earlier.

Though essentially a British production, getting it made has been a global effort. France's Method Films has co-created the project with an Indian animation firm, Toonz, from the southern state of Kerala. American writers were brought in for their tight, punchy writing style and voicecasts were done in Ireland.

Fiennes explains that, although he is pleased to invest in animation in India, it would have been financially impossible to make this sort of production in the UK. The budget for 40 half-hour programmes was £10m. It was billed as a huge investment for the BBC, and it is, but "it isn't as much as it sounds when you break it down," says Fiennes.

For the money, though, the BBC has got much more than a one-off animation series. The interactive website is a huge part of the project, crucial in fact, as the whole point is to wake children out of what Fiennes calls "read-only culture", into "read-and-write culture". He wants to create a generation of pre-MySpacers who feel free to engage with music before they have any musical training. The BBC has other concerns: it has been trailing the show before prime-time adult programmes on Saturday nights, a first for a children's production, in the hope Freefonix will persuade late teens and students to stick with the BBC instead of switching allegiance to commercial channels.