Jemima Robinson, one of the 2012 Linbury Prize winners for stage design, is the latest designer to be inspired to enchant in the extraordinary space that is the Watermill. Thanks to her design for Ben Crystal and director Paul Hart’s shortened The Tempest, her stage and auditorium are so seamless that sitting in the first few rows means you’re actually watching the action from inside Prospero’s cell.

It’s lined with great grey slabs and surrounded by shelves of books and instruments, interspersed with recycled radio sets intriguingly tuned to the shipping forecast (part of Steve Mayo's intricate soundscape). And Prospero is of course cooking up a gale force nine storm to wreck the ship he is drawing to his island.

And the auditorium continues to inspire, for the aisles “are full of music” (courtesy of composer Olly Fox) when the actor/musicians burst on to the stage to open Hart’s production in the style Watermill directors have made their own.

According to a programme note, regime change is a strong theme in the play, whether it’s in Italian city states or at home in Tudor or Stuart Britain. And indeed, the machinations of Antonio, Prospero’s unscrupulous and usurping brother (a Machiavellian Stephen Finegold), and Eamonn O’Dwyer’ s weaselly Sebastian against his brother Alonso, King of Naples (noble, dignified Jeff Alexander) and his counsellor Gonzalo (Johnson Willis' gentle senior) are foregrounded as they stumble round the island.

But of course it’s Michael Hadley’s magisterial Prospero who's moving the chess pieces that are his brother and his allies and the unholy alliance between drunken butler Stephano (James Allen), Trinculo the jester (Tarek Merchant) and Caliban (Tim Chipping), Prospero’s slave (actually a nicely-balanced trio).

Hadley’s is an almost mystical presence, apparently quietly reading throughout these antics, but actually an irresistible force. And yet there’s something endearingly homespun about his magic and his household on the island. Chipping’s Caliban is more shaggy dog than monster and Aoife McMahon’s Ariel dances and swoops through the action, a delicately raggedy hippy.

There’s a graceful child-like sweetness about Greer Dale-Foulkes' Miranda, dressed perhaps perforce in clothes she’s grown out of, and this makes her growing relationship with Jonathan Christie’s attractive and boyish Ferdinand especially charming.

So the masque which Shakespeare places towards the climax becomes a wonderfully home-made affair, with party hats to wear, hula hoops and balloons to play with, trolleys of cupcakes and fudge on offer and everyone playing exuberant music. And it seems more that Caliban is playing Juno and Ariel, Ceres than that the actors are doubling as the goddesses conjured by Prospero!

Gorgeous palaces may be in short supply but as Stephano says: “This will prove a brave kingdom to me/Where I shall have my music for nothing!”