This year has been an annus mirabilis for the period drama, a once-dessicated, inert, bourgeois-pampering sop enlivened by intellectual and formal rigour, cinematic innovation and visual beauty. Now that 'Le Temps Retrouve', 'Mansfield Park' and 'In the Mood For Love' have set the stakes, certain famous practitioners (or embalmers) of the genre for a lazy, cinema-hating, I-don't-have-to-read-the-books-to-be-classy audience have been made redundant.

'House of Mirth' belongs to this iconoclastic group. If the period film is traditionally concerned with offering pleasure - costumes, big houses and estates, decor, dialogue etc. - than 'Mirth' is not traditional - it is a relentlessly observed depiction of one not particularly remarkable woman's fall from grace, lingering particularly on her decline into the working classes (quelle horrible surprise!). It is a rigorously austere film - the surface trappings are minimised, made deliberately artificial or obscured by dull lighting; the use of music is economical, what little there is comes from over a century before the drama is set, less lush, less wallowing, more ascetic, brittle, thin than contemporary late Romantic music would have been; there is no witty dialogue - the dramatis personae are either bores or monsters, all speak with elaborate stiltedness.

Moments of epiphany or beauty are rare; what few there are usually end in artifice, banality or irony. This is a gruelling film to watch, especially in the second half; this doesn't mean that it isn't very moving, or beautiful in a non-superficial sense (much of the emotion comes not from the plot or characters' reaction to it, but Davies' subtle camerawork).

Edith Wharton's story is basically an elaboration of Henry James subject matter, a showing of what he conceals or implies. There is the same horrified fascination with the machinations of class - a viewer has to be quick and alert to catch what's going on, the rules and transgressions only acknowledged by a look, or a seemingly irrelevant sentence, but which have devastating, life-threatening consequences.

Davies doesn't offer us a traditional fall from grace narrative - it is clear from her opening scenes that Lily is no grande dame about to be felled; she is barely hanging on to a hierarchy that barely notices her. Her first appearance announces Davies' intentions as she emerges from the dense steam of a railway engine in a dank railway station. As she walks in the centre of a perfectly symmetrical composition against a neo-classical background to neo-classical music, she looks out of place, almost out of time, a dark silhouette, with no visible features, like the shadow or ghost she will eventually become, or like a strange, mocking figure of 18th century Venetian theatre, with her strange, birdlike hat.

This sense of weightless rootlessness also makes us enquire about her elusive background - Lily literally seems to emerge from nowhere. She is slowly, but definitely, thrown from the unwritten laws of society to a very real material social order, reduced to making hats badly for a living. Her sense of time altars radically too - although society life seems a distinct realm from the 'real' world, there is a noticeable narrative flow, in spite of all the gaps (and this is a film so full of narrative holes, you often think you've been nodding off) and temporal elisions.

But when Lily joins the world of work and time-keeping, narrative time seems to suspend - narrative events don't seem to follow coherently, but in a blur; when Lily first takes laudanum, and the camera floats out the window to the babble of voices from Lily's life, we assume she is dead. Of course, in a sense she is, and this painful second half is like a nightmare hallucination, as Lily floats away from whatever tenuous moorings she ever had.

Her opening scenes with Sheldon have a brittle, nervous quality that initially seems false and irritating, until we realise the full extent of Lily's plight, her ineptitude for the role she is required to play - Gillian Anderson's performance is remarkable, as quietly tragic as those great actresses of the 30s and 40s, her face doing all the acting as she registers the horrors she cannot verbally acknowledge.

Along with Scorsese's, The Age of Innocence and Iain Softley's, The Wings of the Dove, Terence Davies' The House of Mirth forms a triumvirate of modern period drama for a discerning audience. Davies is not interested chiefly in either scenery or costume - that is, in history as a heritage theme-park - but in the story, its themes and characters, and in teasing out good performances from his cast. The modest budget of this film works in its favour. Most of the best scenes and shots are framed in intimacy, not lost amidst panoramas of superficial grandeur or the shallow aesthetics of Merchant-Ivory-style film making.

At the heart of Davies' film is Gillian Anderson's brilliant performance as Lilly Bart. Since she is on screen almost all of the time the film really stands or falls by her performance. She sheds her "X-Files" persona in moments and conveys an enormous range of subtle emotions as her character vacillates between an almost involuntary avarice and moral scruples, foolishness, charm, fortune and tragedy. The affect of Anderson's performance is lasting and deep. Indeed, this film lives on long in the memory and continued to trouble me for weeks after I had seen it.

This is a slow paced mesmerising film. If your only knowledge of Gillian Anderson is as Dana Scully in the X-Files then you are in for a big surprise. Firstly the lady can act, and secondly with great subtlety. If you have read the book then clearly the writer/director Terence Davies has taken a few liberties. But so much script has been lifted word for word from the novel that I think he can be forgiven any eccentricities. This is a story of manners in early twentieth century New York and environs. Everyone seems so decent and 'proper', but each plays their own manipulative game. No-one (with the exception of Sim Rosedale) tells the truth. As a morality tale it seems as relevant today as when Edith Wharton wrote it. Davies has succeeded in losing none of its mood or punch by transferring it to screen. Unfortunately I think this is a film that requires watching more than once as some explanatory scenes appear to have ended up on the cutting room floor. Generally the acting is excellent throughout though I felt that at times Davies's enthusiasm for detail hamstrung some actors where others appeared to have relished the close direction. This is a film to add to your personal collection.