If Moulin Rouge is a pop musical borrowed from classical opera - a high-decibel La Boheme - the 1980 Tony Award-winning show Dreamgirls, now rewritten for the screen and directed by Bill Condon, draws on even older source material, the ugly duckling fairy tale, and gives it a contemporary edge by retelling it as it a thinly disguised version of the rise of the real-life 1960s, set against the backdrop of the civil rights movement (there's even a joke about Martin Luther King) and the Detroit riots.

Shrewdly managed by Berry Gordy, who is fictionalised as Curtis Taylor Jr, a ruthless one-time Cadillac salesman turned impresario - played with dangerous magnetism by Jamie Foxx - the Supremes signalled the emergence of black Americans as a major force in the music industry, through their successful crossover from Motown rhythm and blues to iconic pop stardom.

Condon, who scripted Chicago and made his directorial debut with Gods and Monsters, adds a further frisson to this potent mix by casting newcomer Jennifer Hudson in the pivotal role of the throaty Effie, lead singer in the original three-piece black girl group, who - after their breakthrough as backup singers for a fiery soul singer, loosely based on James Brown and played by Eddie Murphy - is replaced because she's too "disruptive" and doesn't fit in with the group's glitzy new profile (which, by no coincidence, is the same reason Hudson herself was voted off American Idol).

There are parallels too between the gorgeous Beyoncé - the lead singer of Destiny's Child - and her character Deena who takes over from Effie and is pushed by Taylor as the new face of the Dreams (which sort of rhymes with Supremes, just as her name Deena is a reminder we're really watching a Diana Ross impersonation).

Hudson, with her wonderful big voice and soulful face, is the heart and passion of Dreamgirls, her show-stopping 'And I Am Telling You I'm Going' building from a low-pitched almost conversational beginning to a daringly sustained outpouring of hurt, a frighteningly intense anthem for all who have ever experienced rejection and betrayal. Her stubborn refusal to be bowed, a ghost from the past haunting Deena's rise to fame and leaving it with a guilty taste, is beautifully modulated.

Beyoncé is more than up to the challenge of capturing the nuances of Deena's transition from demure singer in the background to full-voiced diva worthy of Ross at her Lady Sings the Blues best.

Although the score of Dreamgirls is largely unmemorable, the lyrics are so charged with feeling it hardly matters. The narrative and the emotional journey of each character - whether in the way Taylor turns from charmer to cad or Eddie Murphy gradually implodes as a soul singer - are expressed through music, with almost every word sung, packing the intensity of a genuine opera.

Some critics profess to find Dreamgirls old-fashioned, yet as a high-budget all-black musical it is breaking challenging new ground.

Commercially, all-black movies have been ghettoised, confined mainly to cinemas in black neighbourhoods. Ray, also starring Jamie Foxx, broke this barrier - although in Ireland it played to shamefully small audiences.

Despite its best musical/comedy Golden Globe win, Oscar voters overlooked Dreamgirls in major categories, confining its nominations to best supporting actress and actor recognition for Jennifer Hudson and Eddie Murphy, with some technical nods. Quite why Hudson, who gives one of the great leading performances of the year, is deemed only to be a supporting actress bemuses me. Presumably it's down to a traditional bias in favour of so-called serious drama.

If she doesn't win, we'll know differently.