Lights. Camera. Action." Everyone knows that cinema is a pantomime enacted for a light-recording machine. As dramatised fiction, its only significant difference from live theatre is that behind the "fourth wall" there is no paying, seated audience but an army of paid, industrious illusion-makers. They are dressed in civvies while, in front of them and their gadgetry, like beings from another dimension, are the people enacting the make-believe.

It is a marvel I still cherish in memory - months after experiencing it at London's National Film Theatre - that arguably the greatest grown-up pantomime in all American talking cinema, Charles Laughton's The Night of the Hunter, now exists "in the round." That is, audiences can watch the process of creation as well as what was created; or they will be able to, once the DVD industry, or a TV channel with enterprise and imagination, options the material and presents it to a larger, grateful public. (The film itself, celebrating its 50th birthday this year, is on Sky Cinema 2 at 10.30pm tonight and at the National Film Theatre at 6.15pm, where it opens a Robert Mitchum season.)

The facts are these. A trove of Night of the Hunter rehearsal footage and film of the filming was discovered a few years ago, a find that for buffs of this unique work is like stumbling on Shakespeare's diaries or rough drafts of The Tempest. Like Shakespeare, Charles Laughton was also an actor. Unlike Shakespeare, he was a star. And the myth he radiated as a performer was that of a vulnerable, touchy-feely genius who could only perform his magic when the conditions were right.

How could such a man, a roly-poly ball of fears and neuroses (if we believe the myth, supported by another cache of movie memorabilia, the rehearsal and shooting footage saved from Josef von Sternberg's uncompleted I, Claudius and seen in the TV documentary The Film that Never Was), become a bullhorn-wielder? Let alone a masterful one? What sort of approach to directing did Laughton have?

We must remember that this man played Captain Bligh in The Mutiny on the Bounty, the ultimate hardhead, as well as the visionary softheads (as producer Alexander Korda saw them) of Rembrandt and I, Claudius. The revelation of Night of the Hunter's "making of" material is that the steely Laughton and soft Laughton co-existed, assuming that these fabled opposites existed at all. Watching him direct is like watching Jekyll and Hyde working as one. It is as though the filmmaking process, or this one at least, were akin to the moment of mid-mutation in the quaffing of the potion or in the post-effect reversion.

The Night of the Hunter is great for its style of magical unrealism. Laughton sprinkled the story of a hellfire preacher (Robert Mitchum) pursuing two children, who know the location of hidden money once belonging to their father, with artifices, childlike grace notes and fairytale scenic touches. He once called the film "a nightmarish sort of Mother Goose tale". Mitchum is part realistic baddie, part pantomime villain. He even has clawing gestures in one scene worthy of Nosferatu, reminding us that Laughton and screenwriter James Agee prepared for TNOTH by studying silent films. The children are older versions of the babes in the woods: they flee to the woods, and the rivers and the fields, as they run away from their tormentor. And Lillian Gish, once an eponymous "orphan of the storm" for D.W. Griffith, is the Bible-spouting biddy who gives them shelter and sanctuary. (Yet another Griffith veteran and former child actor plays the fisherman who befriends the children.)

So Laughton sought a mood of entranced primitivism. How he achieved it is the story of this lost footage, of this "Alice through the viewfinder" glimpse of make-believe in the making. What mainly astonishes is the divergent ways Laughton treated different actors. He is Captain Bligh, a taskmaster with a twist of cruelty, to Shelley Winters, playing the children's mother, and to child actor Billy Chapin. He is Rembrandt, all care and shaping sensitivity, to Mitchum and Sally Jane Bruce, the girl playing Chapin's sister.

To Winters (once a pupil in Laughton's acting classes) he delivers stinging verbal goads and rebukes. "Keep your goddam mouth closed," he snaps off-camera as Winters starts a scene with some slack-jawed sniffling. When she tenses and becomes more distraught: "Oh, if you want to scream, scream." To young Chapin, who came to the The Night of the Hunter festooned with theatre honours ("Most Promising Newcomer on Stage"), Laughton is little short of vicious.

To get the right shocked look for a facial close-up Laughton himself keeps hitting the boy in the stomach, lightly but earnestly, take after take. Though the bullying produced a superb performance, breathless with the tension and horror required, the methods are uncomfortable to watch and even oddly ambivalent. I kept thinking of those Britten operas - Peter Grimes, Billy Budd - in which a boy's mistreatment by an older man carries a freight of frustrated homosexual attraction. Was this behind the cruel alchemy Laughton performed on Chapin?

By contrast he is all sweetness and patient schoolmasterishness to the little girl. "Look at Mitch, dear, in this shot, and what are you chewing?" To Mitchum he is respectfully fraternal, even when the actor sprinkles his dialogue with fluffs. ("You can't remember your lines - now we have to do it again!" pipes the little girl.) To Gish, he is almost reverential.

This footage is an astonishing trouvaille. It captures everything that is contradictory yet miracle-working about Laughton's direction. It also captures everything that is miraculous about cinema itself as a process. In this world, "reality" is conjured at the flick of a switch, like the back-projected lake magicked into being behind actors in a studio boat. Passions, emotions, thoughts can be turned on and off like taps: watch the extraordinary intensity Mitchum sustains, or keeps recreating, as Laughton badgers him for a dozen line-readings, one after the other.

And sometimes, by accident or mystical intervention, the pure and unrepeatable happens, caught forever on film as it never can be in theatre. "I never heard it better told, by Christ

I didn't!" rhapsodises Laughton when Mitchum delivers, with a dark, clinching perfection, his famous parable of "love" and "hate", holding up those fists inked with the opposing words and burning his eyes into his listeners as surely as the scene's light is burning into the celluloid.