Among the highlights of last year's Edinburgh International Festival was an off-the-wall concert of music by John Cage, Edgar Varese and Frank Zappa.

It isn't every ensemble that could pull off such a mix: the programme required fastidious technical precision and fusion guitar solos, early electronic effects and rubber duckies.

Ensemble musikFabrik, the Cologne-based contemporary music collective, clinched the lot. In the Zappa numbers the musicians cheerfully chucked drumsticks at each other and babbled gibberish into loudspeakers while keeping their blues swing dirty and their big-band rhythms airtight. In Varese's landmark early-1930s percussion piece Ionisation, the group's attention to textural detail was revelatory.

This year musikFabrik is back in Edinburgh, bringing a rare spectacle to the festival's closing weekend. Delusion of the Fury is a musical drama by 20th-century American composer Harry Partch. It is part dance, part sonic-art installation; it is Beatles haze-pop meets Ethiopian and Japanese mythology, and it is fabulous. Partch was a maverick musician who built his own bizarre microtonal instruments, and any staging of Delusion requires his whole orchestra to be painstakingly reconstructed. Not only has musikFabrik assembled the instruments (in collaboration with the composer/director Heiner Goebbels), but its members have learned to play them with enough spirit and fluency to bring this strange work to life.

Watching the production in Amsterdam earlier this summer, I became curious: what goes on behind the scenes of Ensemble musikFabrik? The day after the performance, I met with one of the group's members to ask. Dutch trumpeter Marco Blaauw joined the ensemble in 1993 and is currently its acting executive director. He talked me through some of musikFabrik's unusual structures, progressive decision-making processes and appetite for fun.

The first thing Blaauw explained is how Ensemble musikFabrik works as a collective. It was not ever thus: founded in 1990 by a group of composers, it initially operated with a conventional hierarchical structure under an artistic director who was also the conductor. "At first it all went well," said Blaauw, "but interests spread and the group nearly fell apart. Then in 1997 we decided to become a collective. That means the musicians own the ensemble and take responsibility for artistic leadership and financial matters."

"Being a collective is extremely important to us," he continued. "In practical terms, it means that we meet on monthly basis and talk about things. We put a lot of effort into these non-musical exchanges. Sometimes the conversations pile up so much that we decide to take a couple of days off and go somewhere nice together. We leave our instruments at home and meet together as a group of humans."

Inevitably these meetings can produce a degree of friction, so the musicians take training courses to work on communication skills. Blaauw described the workshops as "difficult and confronting at times, but they always resolve into a beautiful realisation that we are a group of people who have chosen to work together. Everyone respects what each other does, and we try to bring out everybody's individuality."

It sounds idyllic, but Blaauw readily admitted that not every ensemble could function successfully as a collective (and indeed, several members decided to leave musikFabrik when the ensemble's format changed).

"Contemporary music needs very strong commitment in the first place," he said. "Being part of the collective is an extra commitment that you have to be willing to make."

That's why the process of becoming a member is long and thorough. Initial auditions are followed by a year or two on trial, after which the whole ensemble must vote unanimously in favour of the applicant. If the decision is a yes, the player is then obliged to take part in "the stuff that happens around the music - the talking, the decision-making, the long-term planning".

There is no winging it with Ensemble musikFabrik; no turning up to rehearsal having sight-read through the part the night before.

According to Blaauw, the key point here is that the musicians' personal investment works in tandem with their playing. "When things aren't going well in a musical sense then we work on it together. That's the big difference between us and most orchestras, where musicians have to give up that level of responsibility. If I am just sitting on my own island saying, 'I am the trumpet player; I always play in time and in tune, and I play louder than everyone else so I am always right' - well, that doesn't work. To reach the highest level of playing I have to be willing to receive honest criticism and willing to give honest criticism.

"It isn't easy to go up to your colleague and say 'hey, you seem to have been having some trouble for the past half year, and it seems to me that maybe you need some help. Is there something we can do for you?' But sometimes these things must be said. Playing and personal life, it's all connected."

The proof is in the performances, and MusikFabrik's artistic calibre shows Blaauw to be right. This is one of the world's best contemporary music ensembles, able to realise the most fiendish scores with precision and finesse. What's more, its concerts always have an enormous sense of fun. The musicians look and sound like they are having a whale of a time - it's an energy that can't be fabricated, and for the audience it is infectious.

I mentioned this to Blaauw and he grinned. "It makes me very happy to hear you say that! There's nothing like playing music in a group that you want to play with. We're not doing this to make money - I mean, we've all got to pay mortgages and so on, but we know this isn't going to make us rich. We just want to play this music."

He said that working on Delusion of the Fury has already had a lasting effect on the group. "We all had to learn new instruments" - (he plays a kithara and sings and acts the role of The Bum) - "and we were each made vulnerable because of that. We were absolute beginners again. This is a piece that involves 20 musicians and no conductor, that is spread over the stage with very strange costumes and lighting... It has taken a huge amount of co-ordinating and careful group work, but I think the experience has been very good for us. It's a big, weird happening, and yeah, it has been a lot of fun."

Delusion of the Fury at the King's Theatre, Edinburgh, this Friday and Saturday