Directed by Michael Winterbottom starring Steve Coogan, Lennie James, Shirley Henderson, Paddy Considine, John Simm, Ralf Little, Danny Cunningham and Sean Harris.

If you were to take the amount of people who say they were one of the 42 who saw the Sex Pistols play the Manchester Lesser Free Trade Hall on 4 June, 1976 you could probably fill Old Trafford. Similarly, if you gathered all the people who said they spent a night at the Hacienda in its heyday you could pack out the stadium out for a month. Both events bookend '24 Hour Party People', Michael Winterbottom's amusing and touching look at the city's music scene and the label which drove it, Factory Records.

Leading us on this journey from 1976 to 1992 is Tony Wilson (Coogan), Factory's co-founder and a man who, to put it mildly, never inspired indifference in Manchester. From his epiphany at a Pistols gig to his building of an empire only to watch it crumble, Coogan's Wilson is only slightly less cringeworthy than Alan Partridge, but has the ability to wind you up and win you over – often in the same scene. Surrounding him are the bands he helped bring to the world: Joy Division, New Order and the Happy Mondays and the behind-the-scenes people, bit players and hangers on who all had their part in the city's story. And with Coogan narrating throughout, and often delivering asides to camera, the story has that knowing quality which glosses over its narrative shortcomings and gives the film a much more wry, sarcastic feel than a straightforward biopic.

Trying to cram so many memories and so much music into two hours is the tallest of orders, but somehow Winterbottom manages to get all the important bits in – from Joy Division recording 'She's Lost Control' to the Happy Monday's disastrous sessions for the 'Yes Please' album. The downside is that with so many seminal moments and anecdotes to cram in, most of the characters have little more than a few lines and even less depth. But with films begging to be made on most of Manchester's legendary bands, Winterbottom's skill is that he gets their spirit across better than most could ever hope to.

Shot on digital cameras, '24 Hour Party People' has that hazy ambience which echoes the scratchy feel of memories people have inside their own heads. Many who were there say that the film takes too many liberties and doesn't tell the real story, but given its subject matter and the music industry's lifesblood of bluff and bravura, it seems to the outsider to be better that way. And as Wilson says in the film, always "print the legend".

But even the detractors would hard-pressed to fault Winterbottom's eye for detail: rebuilding the Hacienda for the film and transforming bunches of actors into acclaimed bands, a process that's so eerie that you sometimes have to squint to tell the difference The soundtracks is flawless, the gags brimming with dour Northern wit and the ability to enjoy history through a rear view is a joy throughout. If you're not holding your ribs at Wilson's contention that it doesn't matter if Factory loses money on every 12" copy of New Order's 'Blue Monday' because it won't sell much anyway, than you lead a very glum record-collecting life indeed.

'24 Hour Party People' is one of the most engaging British films in years and one set to provoke as many down the pub arguments as the music and the man at its centre. It's not perfect, the scenes are often ropey and it really could have done with a tighter script but, as testament to the idea that where you live can be the capital of the world if you think big and brave enough, it's priceless.

Harry Guerin