LONDON -- LIKE the much grander musicals of Hollywood's Golden Age, the script of the small British song-and-dance movie still sitting on Stephen Frears's desk had all the right stuff. Its quirky, true story: how a bored English society woman in the 1930's opened the first theater showing nude musical revues -- London's answer to the Moulin Rouge -- and made it a hit, even during the blitz. Then there was its classic premise: a comic peek behind the theatrical curtain.

There was also its stellar cast, led by Dame Judi Dench and Bob Hoskins, a trove of popular period songs and an award-winning production team to score, art direct, costume and choreograph the modest project, whose fate now awaited the director's verdict.

But after several days, none was forthcoming. So the film's producer, Norma Heyman, who had made Mr. Frears's Dangerous Liaisons and surely appreciated the nuances of its title, nevertheless ventured to phone him up:

''Well, did you like it?'' she recalled asking.

A supremely grumpy voice replied, ''Yes.''

''So how do you feel about it?''

A long pause, and the voice answered: ''Trapped.''

Cornered by an opportunity he deemed ''too good to pass up'' and the gamble of untried terrain, Mr. Frears, a connoisseur of contradictions in his movies and his life finally said yes to another risky liaison. With a humble nod to the legendary Arthur Freed, the man behind MGM's golden chain of movie musicals, he began production last October on his first musical, Mrs. Henderson Presents.

It's a neat twist in a 40-year-career built on unexpected turns, jumping between independent and studio projects, feature films and television movies, and British and American themes. After his early and celebrated British art-house romps, My Beautiful Laundrette and Prick Up Your Ears, Mr. Frears hopped over to the high-born, higher-budget antics of Dangerous Liaisons (his favorite film), then to the American crime caper The Grifters and, later, to the Western-inspired The Hi-Lo Country, the comedy High Fidelity and last year's unsquinting look at London's underbelly, Dirty Pretty Things.

Along with his fellow British realists the directors Ken Loach and Mike Figgis (to whom he shuns comparisons), Mr. Frears's blend of spirited anarchy, social pessimism and wry affection for the underdog helped inspire the new wave of American independent film in the 1980's. But then he answered Hollywood's siren call to direct two ill-fated movies, Hero (1992) with Dustin Hoffman and Mary Reilly (1996) starring Julia Roberts, and found himself battling mushrooming budgets and producer rosters. Clearly, no book had prepared him for the Hollywood mosh pit.

With Henderson Mr. Frears, 63, is reconnecting with the best elements of his past work: a wickedly witty script, a smaller budget (around $20 million) and top-flight talent.

Dame Judi plays the wealthy and eccentric Laura Henderson, who, at 70, converted an abandoned Soho cinema into the historic Windmill Theater and hired the formidable theater manager Vivian van Damm (Hoskins) to run it. The quarrelsome pair soon opened ''Revudeville,'' a mix of musical revues and vaudeville acts, with the sly Ms. Henderson often crashing rehearsals (Van Damm had banned her for being too nosy) by donning multiple disguises, including that of a polar bear, a black man and a Chinese princess.

Still, success eluded their struggling enterprise until they started putting nude models into the musical numbers, dodging the city's Draconian censors by ensuring that the showgirls didn't move a muscle on stage. With these wildly popular ''tableaux vivants,'' the Windmill became a magnet for American G.I.'s during World War II and was the only theater to stay open during the bombing of London in 1940.

Mrs. Henderson Presents, already one of Britain's most anticipated films, features Britain's 2001 Pop Idol, Will Young, in his film debut, as Bertie, the Windmill's star performer, and Kelly Reilly as the Windmill showgirl Maureen. The executive producers of the film, a Pathe Pictures-BBC Films production, are Mr. Hoskins and David Aukin. Ms. Heyman said she expects the film to have its premiere this fall at the Venice or Toronto film festival. And though no American distribution deal has been struck yet, she said many major Hollywood distributors have expressed interest.

Despite a script by the Tony-nominated writer Martin Sherman (The Boy From Oz), a score by the five-time Oscar nominee George Fenton, and a production team that includes the Oscar-winning costume designer Sandy Powell (Shakespeare in Love) and the choreographer Eleanor Fazan (Onegin), Mr. Frears was stunned by the challenge of recreating The Windmill's period song and dance numbers.

''I suppose fear is a rather good thing,'' he observed on the Henderson London set at Shepperton Studios last month. ''Alan Parker once told me you can wing a movie, but you can't wing a musical. So yes, I did feel trapped.''

Until, that is, he and his team discovered a book and saw a documentary on the world of Arthur Freed. From the 1940's to the early 1970's, Freed's ability to lure top actors, directors, choreographers and composers to work cheek-by-jowl in his MGM production offices delivered such classic musicals as Singin' in the Rain, Meet Me In St. Louis and Gigi. The Freed Unit created Hollywood's first and greatest musical repertory company, and counted Judy Garland, Mickey Rooney, Gene Kelly and Busby Berkeley in its fold. That model gave Mr. Frears the key he had been searching for.

''Freed had figured out that you must have all these creative people working together in the same room,'' the director said. ''You can't do it right unless they're all present and thinking the same way. So I got everybody into the same place -- the writer, composer, musical director and choreographer -- and worked it all out. Thank God we read that book.''

With Henderson, then, Mr. Frears has paradoxically created a very British and independent film musical by cribbing from the Hollywood studio handbook. ''We even studied the outline of the Freed Unit's floor plan,'' he said.

A visitor to the Henderson production unit can sense Freed spirit, too. Between shots, Mr. Frears darted like a pollinating bee between the adjoining offices of his creative team (a la Freed's plan), landing in the screenwriter's office without knocking (just like Freed) and interrupting a visiting journalist to discuss script changes (''You're not listening, are you?''). Like Freed, he also commands immense loyalty from his cast and production heads.

''I've learned that Stephen will absolutely not give up until he sees the shot he wants, even if it means my rowing a boat up a river 30 times,'' Dame Judi reported in her dressing room. ''He's wonderfully ruthless and anarchic. I wouldn't have it any other way.''

Occasionally Mr. Frears takes boyish glee in provoking his actors, too. Seeing Mr. Hoskins struggle with a way to portray the irascible van Damm, he instructed the actor to ''just play me.'' ''So I played this grumpy old sod that's a pain in the bum!'' Mr. Hoskins said impishly. ''It was the best director's note I've ever gotten.''

Mr. Frears had the last laugh, however, when Mr. Hoskins and many of the film's dancers had to bare their behinds and their full fronts for one humorous scene. ''All these young gorgeous creatures and there was Old Wrinkly in the back,'' the actor sighed.

''Yes, the nude bits are funny,'' agreed Mr. Sherman, who based the film's tableaux on the Windmill's original programs from the 1930's and 40's. ''But these girls weren't strippers. England during the war didn't have burlesque houses like America did, so nudity didn't have that onus. It was more innocent.''

In one of the film's 12 musical tableaux, ''The Babies of the Blitz,'' a pile of rubble on the Windmill's stage is topped by gorgeous nudes, while on the streets outside, Nazi bombs strip London bare. It's a vintage Frears image in which, once again, he has found a contradiction to savor: ''You see, if you undercut all the sentimentality about the War with a little comedy'' he began, then rose to attend to his actors onstage.

With five shooting days left, would he miss this film and the members of his Frears Unit?

''I'm so knackered that I'm longing for this to finish,'' he replied with a slightly trapped expression, ''and yet I'm dreading it ending, too.''