Alan Parker's 1975 kids-as-gangsters movie has been seen a few times as a stage musical (Sheridan Smith and Jamie Bell both featured in a National Youth Music Theatre revival) and I confess that, when artistic director Sean Holmes announced the show, I rated it a disappointing, too cutesy choice to open the spectacularly rebuilt and redeveloped Lyric Hammersmith.

I could not have been more wrong. Brilliantly directed by Holmes and sensationally well-choreographed by Drew McOnie, the show is a blast from titfer top to tapping toe and contains all the elements of youthful energy and high spirits the whole rebooted Lyric enterprise is hoping to harness and channel back into the locality.

The evidence for this happening started an hour before curtain up, when we were taken on a tour of the new facilities (the Reuben Foundation Wing) over two levels: rehearsal rooms, cinema, dance studio, digital and "sensory" spaces. The architect Rick Mather was a friend of mine (his firm have completed the job in the two years since he died) and the new Lyric evinces all his personal and professional qualities of style, discretion, sleek lines and utter simplicity.

The spaces and foyers are predominantly white and grey, with plenty of sky-lights and smooth, curvilinear finishing on counters, stairways, even floors. (The great Matcham auditorium is unchanged and is now a glorious complementary asset to the modern re-build.)

The Interventionists – a new youth project combining the Lyric's own Youth Theatre with dance, disability and local music groups – populated this new wing with cheek, gusto, synchronised dance and a lot of noise, preparing the path for Bugsy and his pals, who now included a beguiled and unbuttoned, champagne-sipping first night crowd.

The feeling, a rare one in the theatre, was of a whole community on the move – artists, sponsors, kids, rate-payers, parents and politicians – and the turf wars, pie fights, splurge guns and pubescent torch singers of Bugsy popped the communal cork.

Holmes has graded the ages of the cast so that a tiny Bugsy (Daniel Purves) is towered over not only by the huge, hilarious wannabe boxer (Hammed Animashaun, a member of the Secret Theatre company that occupied the theatre during the re-build) but also by his old flame Tallulah (Samantha Allison, every bit as sweet and deadly as Jodie Foster in the movie).

Each leading role has three rotating actors and, as with Billy Elliot and Matilda, you just wonder where they find them. Fat Sam (Max Gill), sculpting his words and gestures with comic finesse, is a parody of Orson Welles, and bluesy Blousey Brown (Thea Lamb), singing her heart out, is Billie Holiday in embryo.

I was nothing but glad to hear Paul Williams's songs again, and musical director Paul Bateman's seven-man band in the pit gives the cast extra oomph, not that they really need it. All in all, this was an extraordinary and unforgettable night, and a highly significant one for the ecology and future of London theatre.

Bugsy Malone runs at the Lyric Hammersmith until 4 September.