At the movies right now, we need comedy. Not funny haha but funny hilarious. How many films do you hear about in advance, await with anticipation, watch with deflation and emerge feeling cheated? Think of a film such as Tropic Thunder, where the forecasted monsoon of laughs was a wet trickle, or Pineapple Express, high on its own stoned enthusiasm.

Here we are with our own Great Recession and it's such an opportunity. In the 1930s, Hollywood resisted the Great Depression with innovation: the gangster picture got smart; the musicals swished with wit and wonder; and the screwball comedy arrived fully formed in 1934 with It Happened One Night, marching on for a good decade to lift the spirits of the American nation. Those screwballs were romantic, sophisticated, eccentric, fast and furiously funny. How many films can you say that about today? Judd Apatow and his stable of stoner movies is perhaps the closest we've got. And yet the best of that bunch – Knocked Up – was still inhaling the fumes of the 1930s. Today, we seem to settle for less, surviving on the thin air of cheap gags designed to tickle teenagers.

I'm not sure there's anything innovative about In The Loop. Nor is British comedy writer Armando Iannucci's first film easy on the eye: crassly shot with fidgety handhelds, it is as picturesque as television, which is no surprise given it began its life there as The Thick Of It. That series spins off here into a fully-formed film that is the real deal: it's the rib-breaker; the bowel buster; the knee-capping-knee-slapper; that rare thing: a comedy in which the laughter is constantly golden.

Iannucci and his team have turned the build-up to the Iraq war into a vicious political satire. Their take on how that dodgy dossier was put together will have you howling, not just with laughter but with moral indignation. Unlike Oliver Stone's W – a film in which the collateral damage made not just George W Bush look stupid, but also everyone else involved in that picture – the writing here is a laser-guided smart bomb. It's a sneering mockery of mass destruction, and makes a fine rubble of the Tony Blair-Alistair Campbell era of spin.

This is the story of Simon Foster (Tom Hollander), a minor British minister for overseas development who finds himself unwittingly caught between the hawks and the doves and a crumbling wall in his constituency. Here, spin-doctors run the show, ministers are pathetic poltroons and political underlings jostle for power. And Foster, a timorous twit, ends up spurring the argument for war, even though it's the opposite of what he wants.

The film flits between Westminster and Washington and you quickly notice the characters are from a dinosaur theme park. The big scary carnivores want war; they charge about gnashing teeth, unleashing reptilian roars. And the gentle, ponderous omnivores want peace but don't have the teeth to stop them. Meanwhile, the diminutive Foster, a spineless, luckless creature, becomes a meat puppet for the Americans, and seems to shrink further in size as he gets tossed about. In a radio interview, he describes war as "unforeseeable", and unleashes upon himself the prime minister's personal T-Rex – Malcolm Tucker, a Campbell-esque spin-doctor who swiftly chomps his head off for not taking a neutral line. Later, in a moment of confusion, he tells TV crews: "To walk the road of peace, sometimes we need to climb the mountain of conflict." Then he's the darling of the US hawks and unleashes Tucker again.

Peter Capaldi's Tucker is a ferocious creation. His eyes burst out of his head on sticks. His words glisten like pointed fangs. To see him in action is the most wondrous thing: he assembles long strings of profanities like vile nursery beads. I started writing some of them down and then gave up: there are just so many contenders for classic lines, though my favourite came swinging in the direction of Foster's communications director Judy (a sardonic Gina McKee) and involved the certain appendage of a horse. It's a reminder of the power of the tightly-packed written line, which has become a rare thing in the era of the omniscient Apatow gang and their brand of loose ad-libbing.

Tucker savages anyone who doesn't follow the government line but In The Loop heaps its sarcastic wrath on the doves. There's US diplomat and bleeding-heart liberal Karen Clarke (Mimi Kennedy), whose teeth literally start bleeding at inopportune moments and who can't get the better of hawkish state department official Linton Barwick (David Rasche). And then there's James Gandolfini's General Miller, a peace-loving brontosaurus. Gandolfini is immense and is even better on the big screen: at one stage, he gets mad and rolls up a magazine; his whole body seems to swell up and he snorts through his nose like a raging bull. But his integrity is just liberal bluster. In the end, he backs down too.

The comedy comes not just from the bad-mouthed badinage, but watching how self-serving and opportunistic the players are. And who better than Foster's slimy adviser Toby (Chris Addison), who cheats on his girlfriend and tells her he did it to stop the war. Now that's the mother of all excuses.

In The Loop makes The West Wing look like a Victorian tea-party. Its comedy is a golden tonic for the gloom.

In The Loop

(Armando Iannucci):

Peter Capaldi, James Gandolfini, Tom Hollander, Chris Addison, Gina McKee, Steve Coogan, David Rasche, Anna Chlumsky

Running time: 109 minutes (15A)

Rating: 4/5