Wilkommen, Bienvenue, Welcome!

Sex, booze, money - 'Cabaret' celebrates them all. But don't be misled, says Murrough O'Brien, beneath the film's newly refurbished surface lies a sinister warning to hedonists everywhere

It is one of the great ironies in modern culture that Christopher Isherwood's quiet, clean prose should have sired the scarlet excess of Cabaret, the 1972 film which is re-released this week. In 1939 he wrote a novel inspired by his sojourn in fascist Berlin. In this book, Goodbye to Berlin, he devotes one chapter to an extraordinary figure called Sally Bowles, a young, rather talentless and insubstantial person who nonetheless intrigued, amused and exasperated him. This chapter was then turned into a play, I Am a Camera, by John Van Druten: this play spawned a musical, Cabaret, and from the musical burst Bob Fosse's masterpiece, a film which carved the image of pre-Hitler Germany into the popular imagination with even greater force and flair than the grotesque cartoons of the aptly-named George Grosz.

As created by Liza Minnelli, Sally Bowles became the icon of Weimar Berlin. There she stands, bowler hat rakishly askew, a sneer on her lips, with thighs to crack ribs and a voice to silence even the tumult of Sodom. Temptress, poor little rich girl, timid, blinking Babe in the Woods, Sally Bowles is one of those figures who illuminate our age by standing in adverse relation to it.

The plot of the film is, as even its devotees confess, a strange, gimcrack affair. Brian Roberts (Michael Yorke), a scholar, comes to Berlin in 1930 – for reasons hard to ascertain – and falls in with the sweet and flighty Sally, the Kit Kat Klub's star singer. After a bungled pass, Sally twigs that Brian is actually gay, or at least terminally frigid. The two become friends and then, sure enough, lovers. Running in tandem to this tale is the curious sub-plot of Ernst, an assimilated Jew who pretends to be Protestant, and Natalia Landauer, scion of a rich Jewish family, who has reasonable doubts as to Ernst's motives. All Brian and Sally's unlikely romance lacks is the disruption of a third person: he appears – a young, smarmily knowing playboy called Maximilian. In one of the films most celebrated moments, Brian bursts out in exasperation:

"Screw Maximilian!"

Sally, after a cool pause, says:

"I do."

She could never have predicted his response:

"So do I."

Max eventually disappears from the scene, and the couple's idyll ends with Sally's realisation that she cannot commit herself to his vision of a domestic Arcadia in Cambridge, and has her pregnancy aborted. They part with a handshake and a promise of reunion which both know will never come to pass.

So what's the fuss about? To answer that, we have to consider the film's strange and fascinating pedigree. Jean Ross, the woman upon whom Isherwood based the character of Sally Bowles, had the good sense to leave Berlin, and later became a member of the Communist party – a decision which, while raising serious questions about her judgement, at least argues a degree of moral earnestness quite absent from the figure in the film.

Isherwood's Sally has some of this intensity, but in a debased and comical form: she is very keen to correct Isherwood's prose, knowing nothing of literature. She is also, crucially, very thin. Judi Dench, who played her in the first London production of the play in 1968, was distinctly curvy, Liza Minnelli too. Nor is this a flippant observation, for it is suggestive that from the moment that this girl with green fingernails tripped into Isherwood's parchment-pale vision, she has grown, swelled. From being the comforting, skeletal clothes-horse of gay fantasy, she has become a cartoon Amazon whose silliness is a crushing reproach to our unfastidious desires.

Then we have the Master of Ceremonies, whose savage chuckle dominates the film, and whose mythic antecedents are even older than Sally's. In Isherwood's novel there is no such figure: now we know why. Like all artists who must make their own masterpiece from another's invention, Joe Masteroff, who wrote the book for the musical, bulked up a character ephemeral to the original vision. As an early review put it: "[the Master of Ceremonies] is slightly sinister, the presiding deity at an orgy."

Joel Grey, who acted the part both in the first Broadway production and in the film, made a habit of not appearing at the curtain call, as if to signal not merely his need to preserve magical remoteness, but that his character lived only in artifice: he is Dionysus, Mephistophilis, the King of Fools. In the world of matter he does not exist: he is part of Middle Earth, an elemental spirit of mischief whom order will drive into the dark. Many critics have made much of Isherwood's presence in the figure of the sexless writer: what none has noticed is that Isherwood's mocking, magisterial voice is found above all in the Master of Ceremonies, who takes no sides, who, to paraphrase Isherwood's opening sentence, is a camera, quite passive – performing, not thinking.

The genius of Cabaret lies above all in its mingling of militant nostalgia and creeping menace. If we consider the songs – in my opinion the best in the history of the musical, with the possible exception of Showboat – we meet a spirit determined to preserve the claims of innocence in the face of madness. When Sally sings of her roommate in Chelsea, she is mourning a Bohemianism which she still thinks can defy the world and win: "But when I saw her laid out like a queen/ She was the happiest corpse I'd ever seen.../ I made my mind up back in Chelsea/ When I go, I'm going like Elsie." There is the jolly cynicism of "Money", the plangent yearning of "Maybe This Time", and the harshness of "Mein Herr", a song fraught with irony, performed by a character who does not find it quite as easy to let go of old love as the lyrics suggest.

The changes in the story between book, play and musical offer us a wonderful paradigm for an frequently forgotten artistic principle: that originality is often a game of Chinese whispers. Isherwood told a tale of a gay man falling into brotherhood with a flibbertigibbet; the musical, depressingly, turned him into a caricature of Middle America machodom. The film shows a man unwittingly, though not unwillingly, drawn into a relationship with someone whose sheer vivacity overcomes his abhorrence for the opposite sex. Cabaret the movie is in other ways weaker than its artistic parents. It is significant, and in some ways disturbing, to note the degree to which the raising of Sally requires the diminishing of the writer: Isherwood is very much in control – the writer at play in a kindergarten – whereas Michael Yorke presents a petulant, silly figure, desperate to assure Sally that he doesn't find her shocking. The narrator of Goodbye to Berlin comments drily that he finds her provocativeness "boring" – as indeed it would be.

In Goodbye to Berlin, the Nazi horror is portrayed as a distant menace; in the film the inevitability of Hitler's triumph doesn't so much lurk in the wings as glower over the stage. For the protagonists in the musical, the world outside is an oppressive, destructive influence. In the film, the threat is very much in the background – a bore. The musical presents a middle-aged couple whose love is thwarted by fear of the future; the film shows a young man bravely confessing his Jewishness and getting the girl. In the film, the song, "Tomorrow Belongs to Me", is a Nazi hymn from the outset, while in the musical it is a patriotic anthem drummed into Satan's service.

The film of Cabaret roars out its reproach to those who claim that if only everyone just loved simple pleasures, appreciated the moment, gave no thought for the morrow, then wouldn't the world be happy? No.

It is odd that so many people see the film as a celebration of unreflecting hedonism, when in fact its message is far darker: the careless will not inherit the earth: it will swallow them up.

'Cabaret', at selected cinemas from Friday