Earlier this year Scorsese travelled to the Cannes Film Festival to introduce the world premiere of a lovingly restored print, which is about to go on selected release across the UK courtesy of Glasgow-based film distributor Park Circus; but this wasn’t the first time he had put his weight behind an attempt to push The Red Shoes further into the spotlight. In the mid-1990s, he contributed a commentary to an American laserdisc edition of the film and, between autumn 2006 and spring 2009, kept a watchful eye on the restoration project in his role as founder and chair of non-profit organisation The Film Foundation.

Over the years, several film-makers have championed this wonderful creation by the legendary production partnership of Michael Powell and Emeric Pressburger. In Scorsese’s case, he has a personal connection to the film – his long-time editor is Thelma Schoonmaker Powell, widow of The Red Shoes’ director. Every time he opens his mouth about it, however, it’s the movie fan inside him, not the film industry bigwig, who speaks the loudest. For Scorsese, the key to the film lies in a conversation between up-and-coming ballerina Victoria Page (Moira Shearer, above and right) and ballet company master Boris Lermontov (Anton Walbrook), in which he quizzes her about her dedication to her profession. “Why do you want to dance?” he asks. “Why do you want to live?” she replies.

“Over the years, I’ve thought a lot about that exchange,” Scorsese says. “It expresses so much about the burning need for art, and I identified with that feeling the very first time I saw the picture with my father. I was so young then. It put me in contact with something in myself, a driving emotion I saw in the characters up there on the screen, and in the colour, the rhythm, the sense of beauty – in the film-making.”

Shot in 1947 by director Powell and screenwriter Pressburger’s company The Archers and released the following year, The Red Shoes is a film like no other, certainly in the history of the British film industry. Buried at its core is Hans Christian Andersen’s fairy tale about an adopted peasant girl whose vanity becomes her undoing when the pair of red shoes that are her pride and joy refuse to stop dancing; ultimately she has to persuade an executioner to chop off her feet. In the film this translates into a central ballet sequence about a young woman who dances herself to death; around this wraps the main story of rising ballet star Vicky Page, her love for young composer Julian Craster (Marius Goring) and the all-consuming devotion to her art demanded by her Svengali-like employer Lermontov.

I’d have no qualms about going one further than Scorsese and arguing the case for The Red Shoes as the best British film ever made, even though what I love about it are the very elements that make it atypical of British cinema. It’s not dourly realist; it doesn’t haughtily hang on to a literary heritage; it’s not about the cheeky spirit of couthy commoners, the honour-among-thieves of Cockney gangsters or any other passing trait that supposedly gives our big-screen output a distinctive stamp. It is instead the pinnacle of Powell and Pressburger’s far-reaching agenda: the creation of a cinematic style that encompasses all of the arts.

The Red Shoes draws directly from ballet, not only because of its setting and fully formed central dance sequence, but because it takes the risk of casting real dancers Leonide Massine (who replaced Nijinksy in the Ballets Russes) and Robert Helpmann (the Sadlers Wells principal now famous as the Child Catcher in Chitty Chitty Bang Bang) in important acting roles. It makes the composition of classical music another driving force of the story, while including elements of big band swing and opera as natural narrative elements. Pressburger’s literate screenplay weaves themes from Andersen’s folk tale through the whole story. Visually, it is perhaps strongest of all as the painterly art of designers Hein Heckroth, Arthur Lawson and Ivor Beddoes blends with the technical skills of cinematographer Jack Cardiff and camera operator Christopher Challis. Powell and Pressburger would experiment further – with film versions of Offenbach’s opera The Tales Of Hoffmann (1951) and Strauss’s operetta Die Fledermaus, rendered on screen as Oh… Rosalinda! (1955) – but The Red Shoes marks the zenith of their vision. This is cinema as the ultimate art form.

By 1948 The Archers had established itself as a leading production company through films such as The Life And Death Of Colonel Blimp (1943), A Matter Of Life And Death (1946) and Black Narcissus (1947), but the new project’s roots went back a decade, to a script commissioned by film producer Alexander Korda who wanted a vehicle for his future wife, Merle Oberon. At the end of the 1930s, according to Pressburger’s biographer and grandson, Kevin Macdonald (himself now the acclaimed director of The Last King Of Scotland and Oscar-winning documentary One Day In September), the writer spent several weeks hanging out in Covent Garden to research the project.

The Korda commission ultimately came to nothing, but it did mean that groundwork had already been done when Powell bought the rights for himself after deciding he wanted ballet to be the milieu for his next work. Painter Heckroth was persuaded to cross the artistic divide and design the film; perhaps this was, as Powell later insisted, a first for the movies, although there were precedents in the world of ballet, as both Picasso and Matisse had designed for the great Diaghilev’s Ballets Russes. Heckroth’s work, along with that of composer Brian Easdale, helped realise Powell and Pressburger’s goal to create a fusion of musical and visual elements that bridged the “reality” of the backstage scenes and the expressionist “fantasy” of the ballet sequence. Heckroth responded by painting a beautiful sequence of oil-based sketches for the entire 15-minute “Red Shoes” ballet that must count among the most exquisite storyboard materials every produced.

Powell was determined to establish a proper on-set ballet company, with a working corps de ballet as extras and famous dancers in the leading roles. Dunfermline-born Moira Shearer had trained as a dancer since childhood and had appeared as a teenager at Sadler’s Wells. She was 21 when photography began on The Red Shoes, but shared her character Vicky’s concerns that anything other than total immersion in dancing could damage her career, having spent the better part of a year turning down the role. “She was so different from the average star,” said Cardiff, who died earlier this year, “in the sense that her main love in life was ballet, not films. The average woman who wants to be in a film, who wants to be an actress … would do anything to be a star in a feature film. But Moira, okay, she’d do it, but she wasn’t going mad about it. She was rather cool about the whole thing.”

When shooting began in Paris in June 1947, Powell had his work cut out juggling the artistic egos on set (his own among the mix). After a week, the production moved to the south of France, then to Pinewood Studios for “narrative” scenes and finally, after a two-week “break” for dance rehearsals, the cameras rolled on the self-contained ballet itself. By now The Archers, who had enjoyed a remarkable amount of freedom within the Rank Organisation’s Independent Producers’ group, had pushed the project nine weeks over its completion date and to almost double the agreed budget. In debt to the tune of an estimated £13 million because of their failure to crack the American market and in need of a sure-fire hit, Rank had a fit when they saw the art movie that Powell and Pressburger delivered.

“When the film was finished, it was shown to J Arthur Rank and his assistants,” remembered Cardiff. “Michael wasn’t present, but Emeric was. When the lights went up at the end, it was customary, even if they didn’t like it, to say, ‘very interesting’ or something. On this occasion they rose and walked straight out, not even looking at Emeric, without saying a word. They thought The Red Shoes was a disaster, an absolute pile of rubbish, and they refused to give it a premiere.”

The Red Shoes didn’t even merit an original poster when it slipped into a single cinema in London’s West End for a short run before an unsuccessful wider UK release. In America, however, it was a different story. The film played continuously for two years at the Bijou cinema in New York and was such a hit nationwide that it was soon reckoned to be among the biggest grossing films of all time. It went on to win two Oscars – Best Art Direction/Set Decoration (Colour) for Hein Heckroth and Arthur Lawson; and Best Music, Scoring of a Dramatic or Comedy Picture for Brian Easdale – and was nominated for three others, including Best Picture.

Powell had his theories about why the film ultimately became a success, as he wrote in the first volume of his autobiography, A Life In Movies. “We had all been told for 10 years to go out and die for freedom and democracy, for this and for that, and now that the war was over, The Red Shoes told us to go and die for Art.” A generation of little girls saw it and wanted to put on their ballet slippers. Hollywood star Gene Kelly admitted that it inspired his ballet sequence in An American In Paris (1951). Directors including Brian De Palma claimed that it made them want to make movies.

So what is it about The Red Shoes that has proved so enduring, something more than the combination of a classic rags-to-riches story and a backstage “overnight sensation” tale? There’s certainly humour to be had in the bustling rehearsal scenes that contrast Lermontov’s tyrannical authority with the hissy fits of choreographer Ljubov (Massine), and both with the everyday toil of the market at Covent Garden, next door to the ballet company’s London base. Powell and Pressburger refused to alienate audiences, placing their story about high art in the real world and, emotionally and psychologically, everything rings true from beginning to end, despite melodramatic plot turns.

Andersen’s fairy tale never lies far from the surface, and there’s a very telling shot that comes not long after the film shifts its action to the south of France. Vicky, about to go to a party and dressed like a princess in a flowing blue gown with matching tiara, has been called to a meeting with Lermontov, where he’ll offer her the lead role in a new ballet to be premiered during the company’s Monte Carlo season. As if to underline the fact that she’s now entering a fairy-tale era in her life, she pushes open a heavy iron gate to Lermontov’s Riviera villa and mounts a stairway that’s overgrown with weeds, like some enchantment out of Sleeping Beauty or Jean Cocteau’s poetically wonderful La Belle Et La Bete. It’s a visual clue to the fact that Lermontov’s offer will demand something from her in return: a “be careful what you wish for” element that adds darkness to all good folk tales. Vicky isn’t a character in a Disney movie, and here the audience catches a glimpse of the shadow that will envelope The Red Shoes at its tragic demise, when Vicky’s own footwear seems to become possessed by a spirit of their own.

Her destiny is also prefigured, of course, in The Red Shoes ballet, which plays complete just over an hour into the film’s running time. With a theatrical flourish, the red curtain opens. Massine, in The Shoemaker role he created for himself, dances in the centre of a proscenium arch that fills the entirety of the cinema screen: in the hands of Powell and Pressburger, the dimensions of ballet have become the dimensions of cinema. Now comes a succession of wonderful visual devices: Vicky seeing herself in the shop window dancing in the shoes she covets, the viciously fast editing trick that ties the shoes’ red ribbons to her ankles, the expressionistic shadows that reach out to drag her to her fate, the sheets of newspaper that rise to dance with her before taking the human form of Helpmann, the orchestra pit that dissolves into crashing waves to match the tempestuous music. And yet, regardless of these heightened cinematic tricks, the ballet happens only when the story demands it, naturalistically in terms of plot development rather than being held back for a set-piece finale. There is more imaginative flair shown here than most film-makers achieve in a lifetime.

The Red Shoes has some obvious direct descendants, from Hollywood musicals, through generations of music videos to Baz Luhrmann’s Moulin Rouge. But it is precisely because it remains truly unique in the repertoire that it can be counted as the best British film ever made. It can still make the most seasoned cinema-goer gasp with surprise at its beauty and audacity, even more so in its newly restored glory of shimmering reds, deep blues, rich yellows and the fiery glow of Shearer’s hair. Masterpiece is a term too easily bandied about by critics, but, in the case of The Red Shoes, it fits perfectly – as romantic art, as story, as emotion, as entertainment, as pure cinema. “All art is one,” wrote Powell, “and in the three lively arts – playacting, dancing, and the movies – the audience is the thing. The world is hungry for art.” And we’re hungry still.

The Red Shoes is at the Filmhouse, Edinburgh, December 11-24; Dundee Contemporary Arts and the Belmont, Aberdeen, December 18-24; and the Glasgow Film Theatre, December 27-30. An exhibition of artwork from The Red Shoes, drawn from the British Film Institute’s collections and personal loans from Martin Scorsese and Thelma Schoonmaker Powell, is on display at the BFI Southbank, London until January 31