Euphorium: The stately pleasure-dome, Camden-style

Coleridge's opium poetry fragment 'Kubla Khan' comes to life in a London undercroft

When the Walkman first appeared at the start of the Eighties, it had the moral arbiters of America in a tizz, predicting the end of all human contact. Californian theatre director Chris Hardman, on the other hand, saw a happier possibility in Mr Sony's new gizmo: "It could," he realised, "put you in someone else's shoes." Since 1982, he and his company have created shows using Walkmans to plunge audience members into the minds of a bomber pilot, a person sliding towards homelessness, a thief and many more.

Now, for Antenna's first visit to the UK, Hardman has gone a step further. They have developed an all-enveloping headset that adds visual trickery to the Walkman audio tracks – to put each individual participant into a private sensory world. Groping around his studio with the new invention on his head, he wondered what sort of world this could be. Alice's Wonderland, perhaps? Eventually, Hardman hit on the dreamscape of Coleridge's opium poem "Kubla Khan". The result, dubbed Euphorium, opens in the undercroft beneath the Camden Roundhouse this week.

Entering at 90-second intervals, each person puts on a headset and then, says Hardman, "you're Coleridge, walking through his dream, seeing all the dream images he saw when he was hallucinating" – stately pleasure domes, sacred rivers, caverns measureless to man, all to a soundtrack of breaths and echoes, music and fragments of the poem.

But this isn't pre-programmed electronic virtual reality – you trigger new sound loops by breaking infrared beams, and most of the visuals owe more to Hardman's stint on a Coney Island funfair than state-of-the-art technology. So, like Alph, the sacred river, you meander with a mazy motion, hanging onto a banister, exploring the caverns under Camden's own stately pleasuredome.

The Roundhouse's undercroft is a maze of bare brick tunnels and alcoves – transformed by Antenna's mirrors and optical illusions to seem more or less "measureless to man". They surround a circular room, which becomes the Opium Lounge where each half-hour visit starts and finishes.

But why "Kubla Khan"? For a start, its paradoxical nature – a world-famous dream – fits the mix of private experience and public play that Antenna shows offer their audience. Each visitor is in their own little world, but everyone can (and apparently does) talk about it afterwards. And the theatre has always loved dreams (Shakespeare's A Midsummer Night's Dream, Calderon's Life is a Dream, Strindberg's A Dream Play), perhaps for their similarity to plays. Both are safe ways of acting out fantasy.

Hardman hasn't gone to town on the more nightmarish elements – its "woman howling for her demon-lover", the "ancestral voices prophesying war". When they're wearing a headset, he says, people want to be safe. "There are a lot of rules. You could throw audiences into crisis environments, but we haven't."

Nonetheless, the thought clearly sparks Hardman's imagination. "You could create hours of tape and put someone in a rented apartment, brainwash them, give them a gun ... It raises gigantic moral issues." Perhaps, as his new artform becomes more widely known, audiences will be able to take more extreme experiences.

Euphorium is being produced in collaboration with Soho Theatre who, despite specialising in text-based new writing, recognised a kindred spirit. Like most people in the theatre, both companies are anxious to find the "milk of Paradise" that is a loyal young audience. Soho's Administrative Producer Mark Godfrey hopes that Euphorium will appeal to the teenagers who are around Camden Market in the summer. The whole idea, including Hardman's livid red opium dream designs, is not a world away from Camden's own wide-eyed, tie-dyed chic.

Antenna's range of venues and techniques is extraordinary – they once used the entire Californian town of Sausolito as a stage, and their work veers from existential, introspective mazes that recreate imprisonment and psychiatric treatment, to stories told on a beach at night, to interactive "carnivals".

Every new technology offers a new possibility. Hardman is keen to explore how MP3 developments could allow him to create new forms of interactive narrative. "People can be asked to make decisions. You could have infrared guns that shoot code to change people's programmes..."

As to whether his work is really theatre, Hardman is unfussed: "Theatre people don't think I'm a theatre-maker; art people don't think I'm an artist.

"There's a lot of fun to be had," he adds. "I haven't even got close to it yet."

'Euphorium': Roundhouse, London NW1 (020 7478 0151), from Wed to 20 Oct