David O Russell's folks saw "Spanking the Monkey" and weren't amused. Must have been the masturbation. Or the incest.

In a crumbling apartment block on New York's Upper West Side, the air conditioner is grinding at SUPERCOOL. An editing machine is buzzing and, on the wall, a clipboard charting the individual sequences of a film called Flirting with Disaster flutters with scraps of paper bearing cryptic notations: a story stripped to its bare bones. "Nancy gives Mel a blow job." "Nancy and Jill unload Stone Age Man." "Tony watches Nancy look for shower cap." "This," says the director, David O Russell pointing to the latter, "this is the really crucial scene in the movie."

He could be serious. Spanking the Monkey, Russell's debut film (the film which has snared him a contract with Miramax, a $1m-plus budget and a cast full of stars for his follow-up feature) is rooted in an obvious but - by so many directors - easily overlooked truth: of small, apparently absurd and insignificant events are grand dramas made. If one were to imagine the scene-by-scene clipboard for Spanking, it might read, roughly: boy settles on the john for a little one-armed combat. Dog pants outside bathroom door. Young girl pops brace out of mouth for her first kiss. Mother drops soap in shower. Large slug of vodka sploshes into glass. Fade to black.

In between, however, big things are brewing. A young man with a promising medical career is emotionally blackmailed into passing up a summer internship at the Surgeon General's office to care for his bedridden mother. In the ensuing mordant comedy of adolescent frustration, accusations of rape and assault, incest and attempted suicide are all on the agenda. And not least the guilty pleasure named in the film's enigmatic title. "I bet Spanking the Monkey has more masturbation in it than any other movie you've seen. It's my character's little ritual: every time the going gets tough he goes to his sanctum sanctorum. The bathroom was the only door to our house that locked. So that was the only place you could have some privacy. It became a place of sexual connotations. At least, it did for me."

Russell is an unabashed egotist. The press-pack for his film contains a mighty wodge of personal musings which, as the Village Voice critic caustically remarked, would be more than ample to detail the career of Akira Kurosawa. Luckily this infinite self-absorption also comes with a sharp sense of irony and some penetrating insights (Russell is 36, relatively old for a first-time director): its title notwithstanding, they make Spanking the Monkey rather superior to the expected self-indulgence.

"It took me years of writing feature scripts to discover my metier. It was only by going into the most embarrassing and disturbing parts of myself that I came up with this. I felt very happy then. I felt like I'd found something I could talk about.

"I did definitely put a lot of myself into it. In a lot of homes in the town where I grew up, you had guys who were very sexually frustrated and mothers who were very sexually frustrated because their marriage had hit the rocks and the husband wasn't around much. They were still young, they were still attractive but they'd given away so much of their own life. A child is an easy thing to hide in; you can defer a lot of your dreams. They'd jettisoned their careers and then later tried to go back. Some women lost their way and became alcoholics or depressives. I know that was typical of my mother. Although," Russell quickly adds before the question even arises, "things didn't go that far for me."

He handles the incest scenes fairly discreetly, not altogether by design. "There was a lot more explicit sex in the original version: a scene where the mother was teaching the son how to kiss and much more action between the two of them. I wanted the actor to do one take where they went all the way, and he wouldn't do it. He just felt too uncomfortable with it."

Apart from the small matter of incest, the film's major underlying theme is of how the hero's family sets out, with an almost wilful dedication, to rob him of his first big break. "It's a little bit of a myth that parents just want to root for their children until they succeed and they're willing to sacrifice themselves for all costs. There's a lot of envy, especially if the parents are at all unhappy; it's a slap in the face to see someone who might be happier. It's more comforting if you can say, 'See, my daughter couldn't make it either'."

All of which made that peculiar rite of passage, where a film-maker unveils his very first effort to his mom and dad, rather more nerve-racking than most. "They saw it in a theatre in Florida with a paying audience, with a strange mixture of pride and shame. They belong to a generation which doesn't like to think about things which are disturbing, especially if it's in their own back yard. You just put on a happy face." Recently, at a party, Russell met John Waters (who must know the feeling) and Waters said it would probably have been better for his parents not to see it.

Now he's sweating away over Flirting with Disaster (OK, says Russell defensively: so he likes gerunds), which is hardly likely to quicken his family's hearts - it's a comedy about a man looking for his biological parents. And that title: isn't it tempting fate, just a tad? "I know, I know, I know, I know!... The pressure is great for the second film; you have to prove that the first one wasn't a fluke. But Disney, which owns Miramax, has already tested it twice and the response has been very good. Then there's a focus group after the screening, which is the agonising part; you sit back while a select group of people is encouraged to tear your movie apart. I hang in and have to listen to them; there's always one person you wanna get up and choke. You realise that there's no such thing as universal admiration; it's a very sobering thing for a film-maker."

Spanking (although it reaped its due share of raves) was not universally admired: several New York friends told me that they just "didn't get it" and a broadly sympathetic review in Variety castigated Russell for his film's "wildly varying tone". But I think their reactions spring from the fact that this is the kind of American movie that we don't see too much of any more. Its distant ancestors, from the late Sixties and early Seventies, are The Graduate (to whose plot Spanking the Monkey bears striking resemblances), Five Easy Pieces, The King of Marvin Gardens: freewheeling, subtle, astringent psycho-comedies which rarely came wrapped in nice neat endings.

These films, with their fine balancing of moods, are hard acts to pull off; past masters like Mike Nicols and Bob Rafelson have long since given up the attempt. But Russell remains steadfast in his intentions: "I just saw Carnal Knowledge again this weekend. Didn't you think it was an amazing movie? That's my goal. My goal is to make movies like that again with really big stars." That's an ambition to applaud and one hopes that, like its predecessor, Flirting with Disaster will triumphantly fail to live up to its name.

n 'Spanking the Monkey' opens tomorrow and is reviewed on page 7.