‘We come now to the Tudor staircase,” intones Lettice Douffet. She then unfolds an amazing tale about Queen Elizabeth I, who, she says, nearly fell down it when she visited the house, but was saved by a gallant gentleman. The gentleman in question was knighted on the spot.

Lettice is a tour guide at a stately home run by a preservation trust. She is popular with her groups of gawping visitors. The only problem is that the stories she tells are often as elaborately embroidered as the stately home’s antique cushions. Some of them are entirely figments of her own imagination.

As Peter Shaffer’s beautifully written play Lettice and Lovage opens, successive groups lap up Lettice’s stories, which vary considerably on each telling, as do the solicitations for “an appreciation” to be left as visitors depart. It’s on the fourth tour that a loud voice says: “Excuse me!” The voice belongs to an Elizabethan scholar, who proceeds to rip the staircase story to shreds. Worse is to follow: a lady in a crisp grey suit announces herself as the personnel manager of the preservation trust: “You are not allowed to accept tips, I believe,” she snaps. An extremely tricky interview follows in her office the next day.

Shaffer’s play then follows the extraordinary twists and turns of the developing relationship between Lettice and Lotte Schoen, the personnel manager, following that initial interview. The play requires top-rate actors in the two leading roles if it is to succeed, and it is here that this new Watermill revival (director Matthew Lloyd) strikes gold. Selina Cadell (Lettice) is perhaps best known for her current role as the besotted, slightly dangerous, chemist in ITV’s Doc Martin, and she develops that character forward into someone who is outwardly even more batty.

But Cadell makes it plain that there is a steely personality beneath Lettice’s fluttery surface — much is explained when Lettice reveals that her mother was a French actress, running her own Shakespeare company.

While Cadell’s performance is a tour de force, she is well matched by Jessica Turner’s Lotte. The icy outer layers of Lotte’s personality are gradually stripped away as she becomes more and more bewitched by Lettice.

In support, Michael Thomas and Helen Mallon deliver strong cameos as an initially pompous solicitor and a frightened secretary respectively.

Part comedy, part serious point-making play, Lettice and Lovage has stood the test of time very well, as this excellent production makes clear.

n Until March 24. Tickets 01635 46044 or www.watermill.org.uk