Don't like joining in? Better stay at home, then

When the audience turns up at Wyndhams Theatre, ready to see Madonna acting in Up for Grabs, they know what's expected of them. As she enters, they must turn briefly into a crowd of screaming pop fans. Then they must sit down, shut up and behave like any other audience. But elsewhere in London, a bunch of young theatre-makers have an altogether more active night out in store for you. Holed up in the half-dark under a railway arch in Bethnal Green, Shunt are a collective of performers dedicated to "exploring the live event". And their new show, Dance Bear Dance, involves you directly from the start. The moment you arrive, you become part of a group of conspirators. What are they plotting against? At first, you're not quite sure. Apart from an ordinary night in the theatre. They're definitely against that.

"A big part of our work," says David Rosenberg, the show's director, "is about being in a space with a group of people." But in their search to find new possibilities for the audience, Shunt are at pains to avoid singling people out. Instead, they find ways of giving the audience a role as a group. When they arrived for Shunt's last experiment, The Tennis Show, the audience were divided into separate groups of men and women. Each group passed through a changing room, complete with appropriate odours, before emerging into the seats of a tennis court to face the opposite sex on the opposite side. In The Ballad of Bobby Francois, both audience and actors became the passengers on a plane. When the plane crashed, the audience became the dead, and for the rest of the show observed how the survivors – the actors – coped.

In Dance Bear Dance, spectators are given a whole range of identities: they are participants in a secret conference, slowly learning what their fellow plotters are plotting; then they become casino gamblers, church worshippers and finally the crowd at an execution.

The first few weeks of previews have provided an opportunity for the company to suss out how people react – and how involved they'll get. "Participating is quite a barrier to cross," says designer Lizzie Clachan. "The aim is to put people in an environment where they feel they can cross it if they want to." Some have felt exposed, but at least one person has already surprised the performers by responding to the demand, "Who put this money on the table?" with a peremptory "I did."

Dance Bear Dance began life as a set of improvisations around Antonia Fraser's book on the Gunpowder Plot. "In all our work," says Rosenberg, "the themes are quite macabre, but humour is an important element. Whatever disgusting, grotesque situation the characters are in, they're still people, with eccentricities." So they started with the executions. Clachan explains that the company wants to explore what happens when the shock of witnessing acts of murder wears off and mundanity sets in. They let the audience decide for themselves whether to watch the executions. Being given the choice is more insidiously unsettling than simply being confronted with horror.

When they began putting this piece together last July, the conspiracy-to-cause-explosions theme had no more than a vague, general relevance. Two months later, Shunt's declared interest in "current events" came into its own. When Clachan read about the attacks on New York, she was struck by the detail that a Koran, a fuel calculator and a plane handbook had been found in an abandoned car at one of the airports: "it was a tiny thing in amongst all the horror... I thought it was satirical. I couldn't believe it – it was cartoonish." There is no overt reference to this, but the show finds strange new uses for such similarly trivial things as matches, red telephones and phrase books.

This tug between insignificant objects and the hugeness of a bomber's desperate intentions is near the show's heart. And so is awful, ludicrous failure. As they struggle to carry out their less than perfect plan – and the audience discover what that plan is – Shunt's latter-day gunpowder plotters take on the haplessness of the shoe bomber Richard Reid and what Rosenberg calls the "ridiculousness" of the American effort to "scour an entire country for one man."

Shunt's semi-improvised approach means that they do not tackle complex political issues in the way that scripted dramas like Tony Kushner's Homebody/Kabul, or David Edgar's Prisoner's Dilemma, can. But what Dance Bear Dance lacks in searing political analysis, it makes up for in head-spinning unpredictability.

'Dance Bear Dance': Arch 12a, London E2 (020 7739 9905), to 10 August