For a taut drama about the relationships between men thrown together in an enclosed space, it's hard to imagine a better setting than the claustrophobic environment of a warship in Nelson's navy. Sailors worked in atrocious conditions for little pay in a life that alternated between the excitement and mortal danger of battle and long periods of intense boredom, with an ensuing myriad of petty squabbles and hatreds. Herman Melville's unfinished novella Billy Budd overlays this with a tale of crime and judgement.

The score of Britten's all-male opera is extraordinary for so many reasons that it's difficult to list them all. Firstly, it uses a sound palette whose breadth is second to none. Britten gives us sea shanties, big hymn-like choruses, unaccompanied quartet or single voice, plaintive solos on alto saxophone, tension-building string passages underlaid by timpani, soothing harp quotes, full orchestral military fervour - a full analysis would take dozens of pages. Next is the use of key and tonality. You would never mistake Billy Budd for being anything other than 20th century, since reams of notes depart from the major and minor scales: chromatics, discords and tritones abound. But with the exception of a few carefully chosen dramatic passages, Britten's music is never strident or offensive: the discords are a sign of music that's always in motion from one place to another in a way that's profoundly satisfying to the ear. Finally, what amazes is Britten's ability to match music and action: for an opera, the music in Billy Budd sounds surprisingly like a very long, very intense film score. The build-up of tension is harrowing, and the moments of release equally powerful; to pick just one example, the music which accompanies the Indomitable's fruitless chase of a French warship takes you at a pace that's quite blistering.

Under Edward Gardner's baton, the ENO orchestra were in marvellous form last night, and the chorus sang out of their skins. After three hours, I felt like I'd been taken through every nuance of the score with care and precision, and also been put through the emotional wringer.

Although the title role is that of the sailor who embodies goodness but (under intense duress) commits a crime for which he must be punished, the opera centres on Captain Vere and his dilemma as to whether to apply the letter of the law or natural justice (it is clear that the letter of the law dictates the wrong course). There's the odd plot lacuna: we never really understand why Billy's nemesis, the Master-at-Arms Claggart, conceives such a passionate hatred of the man - there's a background wash of homosexual undertone, but this isn't really made coherent (perhaps understandably, given the established mores at the time the opera was composed). Vere's change at the end from "what I've done is so dreadful" to "I am redeemed" isn't properly explored either. But overall, the story is powerful and the drama grips.

Kim Begley turned in a wonderful performance as Vere, in turns authoritative, harsh, heroic or pensive, but always musical and elegantly phrased. Matthew Rose gave us undiluted evil as Claggart, his stage presence imposing and his voice reaching from wheedling highs to growling depths. Benedict Nelson's Billy didn't quite convince: he looked good, acted well and sang his big act II solo beautifully, but he struggled to make an impact in the crowd scenes of the earlier acts. Billy is supposed to stand out from the crowd, and Nelson lacked the vocal power to do so. Amongst the minor roles, Nicky Spence impressed as the Novice, as did Gwynne Howell as the old seaman Dansker.

I was less than impressed by David Alden's direction and setting. The libretto, by E.M.Forster and Eric Crozier, is impeccably researched and precise in its depiction of the language used aboard a ship of the period. In this production, neither the sets nor the way the characters moved showed any evidence that the director had been anywhere near a warship. Rather, the prevailing aesthetic seemed to be that of a prisoner of war camp; full length leather jackets for the officers, more leather and much waving of truncheons by the military police, something between industrial workwear and prison outfits for the sailors. When the hands are told to man the decks at the double because the enemy is in sight, they just stand there; when they file out for the execution, they shuffle along in the way of prisoners in a concentration camp. It was all visually quite interesting, but too many scenes just didn't ring true to the environment of the story.

To be fair, this did little to dent my enjoyment. Billy Budd is an outstanding piece of music, it was played and sung with excellence. And while the drama may have the odd leak, it's generally riveting, and makes for a great evening's opera.

Billy Budd, at London ColiseumDavid Karlin reviews David Alden's new production of Britten's Billy Budd at ENO4