Forget Tinseltown - I'm staying in Sheffield

Hollywood darling Sam Mendes may run the Donmar Warehouse, but he's not its only star. Aside from those whose memory will be scorched for a decade by Nicole Kidman's great (and, briefly, naked) performance in Mendes' production of The Blue Room, theatre regulars will mention other equally startling recent moments in the small Covent Garden venue.

Hollywood darling Sam Mendes may run the Donmar Warehouse, but he's not its only star. Aside from those whose memory will be scorched for a decade by Nicole Kidman's great (and, briefly, naked) performance in Mendes' production of The Blue Room, theatre regulars will mention other equally startling recent moments in the small Covent Garden venue.

Michael Grandage, an actor (he starred in the BBC's House of Eliott) who turned to directing only five years ago, has been responsible for a number of them. He transfixed audiences with his dark production of CP Taylor's play Good last year, and he coaxed heart-rending performances this spring from a cast that included Cherie Lunghi and Martin Jarvis in Passion Play, Peter Nichols' story of love betrayed.

Mendes recognised Grandage's skills by making the 38-year-old an associate director and asking him to direct the Christmas show, Merrily We Roll Along, by Stephen Sondheim.

Grandage's cast includes Samantha Spiro, who was also in his highly acclaimed As You Like It earlier this year, and Daniel Evans, a star of Trevor Nunn's National Theatre ensemble last season. Tomorrow he begins rehearsals for the musical which will be receiving its professional London premiÿre when it opens at the beginning of December. Sondheim himself flies in from America for the final rehearsals next month.

"I saw a production at drama school which had a profound effect on me. I went out and bought the music and I've been playing it for 10 or 15 years," Grandage says. When Mendes asked whether he knew the work and would like to direct it, he was delighted. "I knew there was a queue of people who wanted to do it."

The musical was a flop when it opened on Broadway two decades ago and has suffered a history of rewriting since. In the version the Donmar has chosen, it tells a cautionary tale of a successful but unhappy 40-plus songwriter who goes back to address his old school. As the story unfolds, the pupils act out his life, taking the audience back in time to see how it went wrong.

Not content with the Donmar, Grandage has set about transforming the fortunes of the 900-seat Sheffield Crucible. He was already an associate director and, following the departure of artistic director Deborah Paige, agreed to take on the programming. The theatre is as different from the compact Donmar as it is possible to get. The stage is more than 30 feet wide and nearly 40 feet from front to back. "An actor once told me it was one of the few stages in the country where you can run from the back to the front of the stage and feel wind rushing through your hair," he says. "There isn't anything like it in the country. It's a wonderfully liberating space to work in."

So Grandage is thinking big. He wants to put on classics as well as new writing, which he believes to be as vital to the regions as to London. But he doesn't intend to stick to Shakespeare for classics, and wants new writing on a grand scale at a time when most writers are producing two-handers for small studio spaces.

This week a cast of eight premiÿre Accomplices - about a violent northern family - by Simon Bent, whose earlier works include Sugar Sugar at the Bush. A cast of four will perform Mr England, a new dark comedy about a middle manager, by Richard Bean, whose previous credits include Toast at the Royal Court. They will play in repertory and are "of extraordinary calibre", he says.

There is a buzz surrounding Grandage, and his championing of Sheffield is already luring actors never before seen in the city. Joseph Fiennes, star of Shakespeare in Love, will make his Crucible debut in March.

This casting was sheer luck. One of the works Grandage wanted to include in his first season was Marlowe's Edward II. "It's a bold play, a gay play, a political play, but I love Marlowe and I wanted to do it," he says. He discovered on the grapevine that Fiennes had always wanted to play the title role and asked whether he would do it in Sheffield. Fiennes flew in from Europe to watch the director's Crucible production of As You Like It and agreed. Where Fiennes dares to tread, others are likely to follow. "Every time I direct at the Donmar or the Almeida I ask people whether they'll come and work in Sheffield," Grandage says. As for the man himself, the future is looking rosy. "I'm in this luxurious position of having a wonderful intimate space in the middle of London and this fantastic huge space in Sheffield."

So does that mean we'll see his name added to the list of Sam Mendes, Stephen Daldry et al for the job of succeeding Trevor Nunn at the National whenever the vacancy should arise? He shrugs. "I'm happy to be where I am," he says. "It seems to me that one of the greatest things that happened in the arts was Simon Rattle going to Birmingham (symphony orchestra). He turned an orchestra that almost didn't have an identity into one of the best in the world. If he had decided he was only going to do it for a couple of years, that wouldn't have happened. He committed to it and built and built and built. I really admire that."

'Accomplices' by Simon Bent and 'Mr England' by Richard Bean: Crucible Theatre, Sheffield (0114 2496000), 25 October to 18 November; 'Merrily We Roll Along' previews at the Donmar Warehouse, WC2 (020 7369 1732), from 1 December