Directed by Fernando Meirelles. Starring Matheus Nachtergaele, Seu Jorge, Alexandre Rodrigues, Leandro Firmino da Hora, Philippe Haagensen, Johnathan Haagensen, Douglas Silva, Roberta Rodriguez Silvia.

In the 1960s, faced with urban decay and large-scale slums, city planners decide to create a brand-new suburb, giving the poor access to public housing. It is built without any amenities and without any consideration for the people who will live there.

Before long the estate is decaying and crime-ridden. Faced with unemployment or badly-paid menial work, most of its young people opt for drugs and gunplay. 'City Of God' might be set in the outskirts of Rio, but its situation has universal echoes.

The film is an assured meditation on the inevitability of violence in a ghetto where people are almost entirely without hope. Fortunately the killings, and their underlying social discontent, are lightened with dark humour and engaging performances.

The acting is uniformly authentic, understandably, as the child actors were recruited from the favela streets in which the film is set, avoiding the saccharin gloss of stage school.

Different actors play the main characters, as children and as young adults. Douglas Silva is arresting as the child villain Little Dice, whose cold-eyed acceptance of murder as a tool of self-progression is utterly convincing. Leandro Firmino de Hora also excels in the same character's adult role, with a performance that is spine-chillingly real in its lust for power and disregard for human life.

Many key moments are familiar, but none the less powerful for it - the narrator is unjustly sacked from his dead-end job, and then sees a drug lord of his own age showing off his new motorcycle. The problems of young love, staying on the straight and narrow and eventually escaping the ghetto are amplified by the ultimate price paid by so many of the characters.

'City of God' tells its episodic story with the help of strong performances, but the film also excels in technical areas. Cesar Charlone's grainy, sun-drenched camerawork is reminiscent of 'Traffic', while Daniel Rezende's stunning, hyper-kinetic editing only occasionally distracts from the film's flow.

Most of all, the film is heartfelt and full of passion, without ever descending into sentimentality. It might be early days, but 'City Of God' is already a contender for the best film of 2003 and Fernando Meirelles is a name that you will definitely hear again.

Luke McManus