M. Night Shyamalan wants to tell you a bedtime story. In some senses he achieves this aim but in other ways this very remit makes the film flawed. He seems to know this too and tries to sidestep criticism by having a film critic (played brilliantly annoyingly by Bob Balaban) spout pontifications about plot, structure and movie clichés – clearly indicating that his previous films, often unfairly maligned critically, were a commercial success regardless. What do the critics know? The audience knows best. Unfortunately if audiences do know best they certainly don’t need to witness Mr Shyamalan’s spleen venting at people who are going to dislike his film anyway. C’est la vie.

Apartment caretaker Cleveland Heep (Paul Giamatti from the inexplicably acclaimed Sideways (2004) and the marvellous American Splendor (2003)) stumbles upon a naked woman in the swimming pool he maintains. Or is she a woman? It turns out she is a Narf, a dweller from the Blue World that split off from our own in the time of myths. She needs to return to her home world in the claws of an eagle. If only it were that simple. There are dark beasts in the grass who want the Narf dead and are willing to break a long truce to achieve it. Can the assorted inhabitants of the complex rally together and help this refugee in a world far from her own? Or will the forces of darkness prevail?

M. Night Shyamalan’s great ability as a filmmaker is to make the extraordinary appear mundane. Unlike, say, Tim Burton, whose films similarly deal with the clash between fantasy and reality, Shyamalan prefers to integrate the fantastical rather than differentiate it – to show that there are things beyond your limited understanding around you all the time. To some extent he achieves this by using an increasing roster of well-regarded cinematographers (here ably abetted by Christopher Doyle) and a naturalistic use of lighting. With The Lady In The Water Shyamalan has much to do in order to integrate the fantastical elements into the film in a matter of fact manner but, for the most part, he succeeds. Indeed there’s rarely a moment when you don’t buy into the whole Blue World and its creatures, or the bizarre menagerie of stoners, visionaries and writers that populate the apartment complex – if anything the real world is more bizarre than the fantastical one. And none more bizarre than self-professed experimenter Reggie (Freddy Rodríguez) who is working out one side of his body… but not the other.

This is a film whose characters are deliberately broadly sketched which means that keeping track of the diverse cast is never an issue. Whether you believe that Vick the writer (played by Shyamalan himself) is going to produce a world-changing novel but not live to see it is, perhaps, a moot point. Shyamalan’s problem lies not in his tale or in his cast of characters, but his script. He sticks far too closely to the bedtime story remit in that the nature of the situation reveals itself in episodic (Night-ly if you’ll excuse the pun) chunks. This works in films like The Neverending Story (1984) or The Princess Bride (1987) where the episodes are largely separate from the overall story arc, they are mini adventures and encounters. However here the episodes are intrinsic to the continuation of the plot. Whenever Cleveland gets stuck in his investigations he merely goes to Mrs Choi (June Kyoto Lu) via her student daughter to glean a bit more of the legend. He acts upon it. Then everything seems fine. Then it doesn’t. Then he’s back to Mrs Choi. Repeat. This is fine when you are telling your bedtime tale over a number of nights to keep interest without having to keep track of too much information, but in a single film it feels lazy.

Ultimately what we have is an amalgam of Edward Scissorhands and Serenity, only without the former’s topiary or the latter’s kung fu. Person stumbles across a humanoid being from a fairytale world and indescribably horrible beasts are on a mission to kill her. It’s a good story with plenty of scares and jumps, a suitably eclectic cast and it generally has its heart in the right place. Unfortunately the plot is needlessly convoluted, episodic and self-indulgent. A little script polish would have turned this into a great realist fantasy rather than an enjoyably flawed fable.

Lady in the Water is out now.