Is the legacy of the ancient world stifling modern Greek drama? Continuing our European theatre series, John O'Mahony reports from Athens 

Epidaurus is one of the most idyllic spots on earth. Located around 120km south-west of Athens along the Aegean, the village of Palea Epidaurus is a coastal haven of pristine white beaches, a favoured playground for the country's wealthy elite, whose 20m yachts line up along the pier.

On an overlooking hillside lies the Small Theatre, a perfect arc of limestone dating from the 4th century BC, but excavated only in 1972, and now used mostly for music concerts. And 15km inland is the magnificent main theatre of Epidaurus, which fans out from the 58m disc stage into a gigantic amphitheatre, with a capacity of around 12,000 spectators. Painstakingly restored, Epidaurus is the embodiment of Greek ideals of architectural symmetry and remains one of the great surviving treasures of the ancient world.

For contemporary Greek theatre, however, the legacy of Epidaurus is much more infuriatingly equivocal. It provides one of the highlights of the Greek cultural calendar, the annual Hellenic festival of Greek drama that draws thousands each weekend in July and August, a uniquely populist theatre event. Every Greek director of note has mounted productions of the 33 extant tragedies and 11 comedies here, alongside interpretations by some of the world's foremost directors: Peter Hall, Peter Stein and Ariane Mnouchkine among others. Epidaurus has become an essential rite of passage, testimony that a young, promising Greek director has finally arrived.

At the same time, the long shadow of tradition has transformed Epidaurus - and to a lesser extent other ancient sites such as the Herod Atticus Theatre in Athens - into a bulwark against innovation. For the most part, the acting style that dominates is one of contrived high artifice. 

 An army of conservative critics carefully polices every production, savaging any whiff of novelty and pouncing on even the vaguest suggestion of modernism.

Epidaurus audiences, often equally critical, have been known to shout down performers and even invade the stages of offending productions. "We have these wonderful open-air spaces, which are a kind of heritage," says Mikhail Marmarinos, one of Greece's avant-garde directors, "but it is difficult to have a flexible relationship with this heritage. We have been overburdened by it."

The history of Greek drama over the past 50 years has been mapped out by regular, clamorous scandals at Epidaurus and the other sites. One of the first directors who attempted to deviate from the traditional approach was the legendary Karolos Koun, who had been born in Prousa (then Asia Minor), and brought eastern radiance to a scene in thrall to lugubrious Germanic influences.

Much of his iconoclastic attention was directed towards Aristophanes's 5th-century-BC political comedies, which were treated to bawdy, Technicolor stagings. Koun was perhaps the first director to seriously experiment with the chorus, now the yardstick by which new productions are measured. His controversial 1957 production of Aristophanes's The Birds was booed off at the Herod Atticus Theatre, when the play's priests appeared sacrilegiously dressed as Greek Orthodox clergy, including beards, cassocks and stove-pipe hats. His 1964 production of Aeschylus's The Persians in London transformed the chorus into a band of ecstatic whirling dervishes.

One measure of mainstream conservatism is that it wasn't until 1984 that Epidaurus risked a modern-dress production of a tragedy: Euripides's Alcestis, directed by Yannis Houvardas.

"This performance became a kind of a red flag for rightwingers," says Houvardas. "The audience was split in two - one half shouted 'shame', the other half shouted 'bravo' and the performance had to be stopped for 10 minutes. There were violent reactions by conservative old actors who were in the audience. They walked on stage and physically wrestled with the performers."

Since then, scandals have erupted at Epidaurus approximately every three years, most recently in 2000, with the infamous Electra With Tied Feet, directed by Mikhail Marmarinos, in which Sophocles's heroine sported a kind of S&M leather ankle restraint. "I prefer struggles and fights on stage to be real in a literal sense," Marmarinos says. "But the actress who was playing the role was so strong physically that when the chorus tried to restrain her as part of the action, she easily broke free. So, then I struck upon the idea of binding her feet and having her brought on stage to do her first speech in a wheelbarrow. There was a gasp in the auditorium."

With such gargantuan struggles taking place on the Adriatic coast, the rest of contemporary theatre in Greece can at times appear inconsequential. Yet Athens actually hosts more than 100 professional theatres, from the large commercial venues on Panepistimiou and Ippocratus Streets, mostly hosting trashy contemporary comedies to more serious enterprises like the tiny Teatro Amore, run by Houvardas.

Rather like a Greek version of the Royal Court, Teatro Amore aims to introduce audiences to the classics of the European repertoire and has premiered works such as Far Away by Caryl Churchill, Mark Ravenhill's Shopping and Fucking and Patrick Marber's Closer, as well as late 19th and early 20th century work. 

"This theatre was the first repertory theatre in Greece," Houvardas says, "and to date, we are the only one that is following this road. When we started, we filled a huge gap, there was nothing like this before, and work like this was simply not seen."

Marmarinos also has his own base, the Diplous Eros company, located in a funky warehouse space in Athens's labyrinthine industrial sector. Here, he has directed plays by Pinter, Genet, Arden, Müller, Strindberg and Brecht, as well as collaborating with Heiner Goebbels on Medeamaterial and creating his own pieces such as National Hymn (2000), an incantatory exploration of the country's identity through a ritualistic group of actors based directly on the Greek chorus.

In the smaller experimental stage of the National Theatre, young director Stathis Livathinos has been stirring up the rather staid repertoire with daring productions of Mamet's Glengarry Glen Ross and Love's Labour's Lost, which proved the hit of last season. This year at Epidaurus, it is Livathinos's turn to don the iconoclastic mantle with an alternative interpretation of Euripides's Medea. "I think that for the Greeks the problem with tragedy is the same as the English with Shakespeare," he says, "a very strong tradition mixed with preconceived ideas."

In a titanic clash of old and new, he is pitted against veteran director Spyros Evangelatos, considered a hot young firebrand himself back in the 1970s but now an ultra-conservative bastion of baroque traditionalism. "Directors who work on ancient Greek drama belong to two categories," Evangelatos says. "The first believes that these texts are still living and they try to bring as much as possible of the meaning of the drama to the modern audience with the aesthetic that every one of them already has. The second group believes that the text is dead and that ancient Greek drama is an excuse to show that they are directors. I belong to the first category. I believe these texts are still living and offer us the possibility of serving them."

The two productions couldn't have been more opposed. Livathinos infused the story with an almost impressionistic sense of menace, employing a wailing chorus in wedding dresses who splashed around in an on-stage swimming pool. 

At the opposite end of the scale, Evangelatos's Hecuba was stodgy and indulgent, with every line drained of psychology and drenched in overwrought emotion. The only stab at innovation was paring back the chorus to just seven singers/actors/dancers, which smacked of cheap musical theatre.

In one extraordinarily indicative moment, when Hecuba discovers the corpse of her son, actress Despina Bebedeli emitted perhaps the most startlingly unnatural noises ever heard on any stage: a gnarled, rasping, bloated croak, which drew applause even before it had ended. "The route of modernism is to shirk away from this kind of emotion," says Evangelatos. "It takes a great deal of courage to play this moment in this way. For me it is not old-fashioned. It is theatre with a capital T. The applause of the audience was unexpected, but honest and direct."

In the local Greek press, the Livathinos production was savaged as "irrelevant stage effects which underestimate the intelligence of the public", while Evangelatos was praised for "allowing us to experience the text in its living entirety". Despite being bruised by the experience, Livathinos still believes that such moments of conflict are actually the points of contact where reactionaries and innovators face each other, and one day may understand that their ultimate aims are not so dissimilar: to effectively communicate these great works to new generations. "Now it is a very difficult time for tragedy in Greece," he says, "because it needs renovation, it needs scandals if you like. It is always new when you are making a discovery about human life. And there is plenty left to discover in the classics."