Hartlepool is proud of its heritage. Local legend has it that, during the Napoleonic wars, the townsfolk tried and hanged a monkey believing it to be a French spy. True or not, there are apes all over town. A bronze statue looks penitent enough, but the football club's mascot, H'Angus the Monkey, most definitely doesn't. One mayoral candidate wore the costume and won office by promising bananas for all.

Puppeteers Gyre and Gimble's new show insists it's nowt to be proud of. In Carl Grose's retelling, the lynched chimp becomes a symbol of the ignorance underlying xenophobia. In a town that's very clearly had enough of experts, people are so blind to the wider world that they mistake a monkey for a Frenchman. If its shrieks are unintelligible, well, that's French for you. Heck, these Hartlepudlians are wary enough of their nearest neighbours as it is. Stockton gets the side-eye. Paris is another planet altogether.

The risk is that this hangs Hartlepool out to dry. The town voted Leave by nearly 70 per cent, and, though that's left unsaid, it's hardly let off the hook. Grose's setting blurs the Napoleonic wars with the neglected north of austerity Britain. "Nothing ever happens in Hartlepool," the locals moan, and Jonathan Dryden Taylor's overkind landlord is close to going under with unpaid debts. Meanwhile, the town's corrupt elders – a dodgy doctor and a scheming priest – stand in for today's self-interested elites. They lie like Leave campaigners and, along with a musket-waving old major, whip the crowd into a jingoistic frenzy under the guise of war-time patriotism, before blasting a French warship out of the water.

Grose hones in on two of its surviving sailors – a stowaway girl disguised as a boy, the ship's powder monkey (Rebecca Collingwood), and its primate mascot, Napoleon. The pair of them contain a hint at the myth's real roots, but Grose never entirely brings that to bear. Instead, he tells a hopeful story of teenage friendship: a sickly Hartlepool teenager takes the French sailor into hiding. She, in turn, clings to her patriotic duty attempting to blow his father's pub to bits.

Really, it's a vehicle for Gyre and Gimble's new puppet – the Hartlepool Monkey itself. Designed by directors Finn Caldwell and Toby Olié, it's almost as engaging as the real thing. Manned by three puppeteers, bunraku style, it swings off the stage rigging and bounds between platforms. Stupid as it sounds, it's strikingly non-human. It's stretchier and springier, like a simian accordion, and with hands for its feet, it can manoeuvre itself as monkeys do. The moment it stands up straight, beneath the captain's bicorn, and impersonates Napoleon, it's immediately uncanny. Yet, it's still human enough to elicit sympathy when tied up and tortured ahead of its trial.

The pity is the rest pales in comparison. Grose's satire can be stodgy and it dearly needs a decent director, someone to lighten the literalism with play. The style is Kneehigh minus mischief or imagination, so gags creak like ships' bows and ham-acting lacks humour. Samuel Wyer's nautical design, all rigging and sails, is as messy as it is mundane and, ironically for a puppet show, there's very little theatricality. The show, as a whole, commits theatre's cardinal sin: it's boring – one great monkey and a whole lot of business.

The Hartlepool Monkey runs at Stratford Circus until 30 September, then tours.