James Bond actor Daniel Craig and Queen Elizabeth II stole the show at an exuberant 2012 Olympic opening ceremony today.

The pair appeared together in a short film beamed to 60,000 cheering spectators in the main stadium and a billion more viewers around the world.

The comedic, quintessentially British moment complemented a show that film director Danny Boyle, turned into an unabashed celebration of the host nation's history, culture and eccentricity.

In the tongue-in-cheek film Craig wears his trademark tuxedo and enters Buckingham Palace, the 86-year-old monarch with her two corgis at her feet, turns from a writing desk and says simply: "Good evening, Mr. Bond."

The moment drew a huge cheer from the audience, not used to seeing the queen play such an informal part in proceedings.

Doubles of Bond and the queen then parachuted onto the roof of the stadium from a helicopter, built on the Olympic Park in a once derelict area of London's East End, and the national anthem and Union flag raising followed.

The surreal footage and stunt had been kept a closely guarded secret in the build-up to the ceremony, which also includes speeches, the athletes' parade and the lighting of the Olympic cauldron.

Over the following 17 days, the drama of sporting contest takes hold the length and breadth of Britain as more than 16,000 athletes from 204 countries will aim to achieve their ultimate dream - Olympic gold.

The ceremony, inspired by Shakespeare's "The Tempest" and packed with literary and musical references, began with a recreation of an English rural idyll complete with grassy meadows, fences, hedges, a water mill, maypoles and a cottage.

A cast including shepherdesses, sheep, geese, dogs and a village cricket team filled the stage during the one-hour prologue to the show that included a dramatic, low-level fly-past by the jets of the Royal Air Force's Red Arrows stunt team.

After "England's green and pleasant land" came the "dark Satanic mills" of William Blake's famous poem.

In the next phase titled "Pandemonium", grass was brutally uprooted and fences dismantled to be replaced by a blackened scene that recalled the Industrial Revolution.

To the deafening beat of hundreds of drummers, giant chimneys rose from the ground and began to belch smoke as a small army of volunteers, dressed as 19th century factory workers, forged one of the five Olympic rings.

The giant orb was raised to the sky to join the four others, letting off a fountain of sparks, drawing gasps from many in the audience.

All around, especially designed "pixel" light boxes installed next to every seat accompanied each scene with giant images of waves, flags and words.

At one end of the stadium stands a grassy knoll topped by a tree and at the other end the 23-tonne bell, which Bradley Wiggins, Britain's winner of this year's Tour de France, rang to kick off proceedings.

In front of each is a "mosh pit" of people conjuring the spirit of the Glastonbury music festival and Last Night of the Proms classical concert.

Among the crowd were celebrities, ordinary Londoners, visitors from abroad and dignitaries including U.S. First Lady Michelle Obama as well as presidents, prime ministers and European royalty.

Boyle's colourful and sometimes chaotic vision aims to create a kaleidoscope of what it means to be British, an approach that could appeal to the home audience but leave many foreign viewers scratching their heads at times.

Divided into three main sections, it also celebrated the National Health Service, cherished by Britons despite being a political hot potato at a time when austerity measures have forced major spending cuts.

Boyle has conceded that audiences overseas may be confused.

"In the second half of it you'll see what we call the industrial parade which is actually slightly surreal, some of you will be baffled, I can guarantee it," he told reporters.

He also paid tribute to the 10,000 volunteers, cast and crew taking part in the ceremony.

"We hope the feeling of the show is a celebration of generosity," he said. "There's no better expression of that than these volunteers."