YORK Theatre Royal's Christmas show for children carries a health warning: "Night, Night, sleep tight, don't get up while it's still light or the dragons will bite!".

Trouble is, you will have to get up while it's light to see this daytime show, but hey, kids, live a little dangerously, just like Effie and Harry, the dragon detective heroes of E. Nesbit's The Book Of Dragons.

Mike Kenny's adaptation of E. Nesbit The Railway Children brought York Theatre Royal one of its greatest ever successes, a show very much on the right track at the National Railway Museum, Waterloo and King's Cross in London and in Toronto. Now associate director Juliet Forster adapts a Nesbit story for a show on a smaller scale for children aged three upwards and their families in a Theatre Royal landmark moment.

After productions in the De Grey Rooms ballroom, in the foyer and elsewhere, The Book Of Dragons is the first ever Christmas children's show in the Studio, a space that so suits such performances with its intimacy, its ready interaction between performer and audience.

We enter a winter scene: the stage floor and matching wall behind painted in white against a black background with a wintry cloud above; in the centre is a white box with almost as many utilities as a Swiss Army knife, from steps to props storage to a dragon's den, of course.

Forster has selected five of Nesbit's nine dragon tales, including the Forest Hill Ice Dragon and her favourite from her childhood days in the very same Forest Hill, the Fiery Dragon, and finishing with the Last of the Dragons (or could dragons still be here, as a roar at close of play teases?). In between are dragons the size of kittens up to the size of a house.

Forster's storytellers are Elizabeth Mary Williams and Emilio Iannucci, bright young professionals with specialist physical theatre stage craft, comedic nous and an easy manner with children. Williams is trained in aerial circus skills too, which comes in handy in one wow moment here, joined mid-air by Iannucci, who is keeping up the family name in finding humour in myriad situations.

Williams's schoolgirl Effie and Iannucci's university student brother Harry are reunited for the Christmas holiday and a chance to bring out The Book of Dragons, beautifully illustrated here by designer Bethany Wells, as the turning pages come alive before our eyes in such wondrous, imaginative and humorous adventures re-enacted from their childhood years.

Forster loves how Nesbit's stories "made it seem entirely possible for adventures to begin at home and end up as far away as your imagination can take you", and through a combination of her suitably fantastical adaptation, Williams and Iannucci's delightful performances, Wells' assorted dragons and Jonathan Eato's sound designs, these dragons feel very close at hand indeed, in your Yorkshire back garden, as Forster says, even when we travel to the North Pole.

The imagination has a field day with the dragon world in the Studio – a Nesbit world where a turn of an unseen tap can alter the weather – while the shadow puppetry sequence is as magical as theatre can be. Frost and fire, fun and games, dragons and detectives, this is child's play at its best.

The Book Of Dragons, York Theatre Royal Studio, until January 6. Box office: 01904 623568 or at yorktheatreroyal.co.uk