Privates on Parade, Noel Coward Theatre, London

Knees up: Simon Russell Beale, centre, camps it up in Privates on Parade (Johan Persson)

His staging of Privates on Parade at the Donmar Warehouse in 2001 was one of the productions that marked out Michael Grandage as the natural successor to Sam Mendes.

Now, on the other side of a triumphant decade at the helm there, the director has chosen to launch his new project – the Michael Grandage Company – with a second look at Peter Nichols's hilariously satirical revue-style 1977 play about a British Army song-and-dance unit (where men were men and so were the women) in Malaya in 1948 during the Communist insurgency.

This is the spirited opening gambit of a fifteen-month season in which the Company will offer five lusciously cast productions using a new pricing model whereby roughly 200 seats per performance (three-quarters of them, admittedly, in the balcony) will cost only £10. This combination of affordability plus some seriously top-drawer names is designed to lure in a young audience for whom the West End is normally out of reach.

The main marquee attraction in Privates is Simon Russell Beale who has never done drag before but is now making up for lost time in a big way in his sublime portrayal of the outrageously camp Captain Terri Dennis.

Compared to the madly stage-struck and gloriously over-the-top impersonations of Marlene Dietrich, Carmen Miranda, and Vera Lynn that he gives us here, most of this year's pantomime dames are going to look about as extravagantly out-going as an anchorite nun.

The great thing about Beale's performance, though, is that it manages to be both blissfully broad – whether he's letting out a little wince as his suspender-belted bulk strains to straddle a bentwood chair in the “Blue Angel” sequence or rolling louche, mascara-lidded eyes as he dispenses endless doubles entendres – and humanely subtle too. From under the mountain of slap, he lets you see the man who has suffered – self-involved but observant and shrewd, and prepared to turn fairy godfather,too when a heterosexual man fails to do his duty.

In Grandage's assured, beautifully well-cast production, the Oh What A Lovely War-like blend of end-of-the-pier vaudeville and political anger becomes powerfully expressive as the piece shifts between the concert-party turns (the spot-on musical pastiches are by Denis King) and scenes depicting the unsentimental education of 20-year-old newcomer Private Steven Flower (a beguiling Joseph Timms).

Angus Wright is very funny (and oddly sympathetic) as Major Flack the barmily myopic and out-of-touch muscular Christian. Oh, and by the way, there are, in every sense, privates on parade.

2 March 2013; 0844 482 5140