MATTHEW Lenton is looking decidedly chilled.

Sitting in the Royal Lyceum Theatre rehearsal room in Edinburgh, as he explains his thinking behind his forthcoming production of A Midsummer Night's Dream, his demeanour is as far removed from the last time he spoke on these pages as he can get.

Then, Lenton and his acclaimed Vanishing Point company were about to premiere Wonderland, a major new commission at this year's Edinburgh International Festival. After more than two years development spent exploring the dark underbelly of internet pornography, Wonderland was an understandably intense experience for everybody involved. While Lenton's dramatic curiosity remained unbowed, he looked exhausted, and not a little haunted. He was also in the thick of the ongoing firestorm over national arts funding agency, Creative Scotland.

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Lenton was one of the first high-profile artists to speak out publicly against Creative Scotland's scrapping of the organisation's two-year flexible funding stream in favour of project funding. This has effectively put the future of 49 arts organisations, including Vanishing Point, in jeopardy.

Since then, as has been reported on these pages, Creative Scotland's credibility has been questioned further, while Culture Secretary Fiona Hyslop encouraged Creative Scotland to be more transparent in its dealings with artists. Last week, a letter signed by 100 leading Scottish artists was sent to Sir Sandy Crombie, chairman of Creative Scotland's board, expressing their dismay at the Government quango.

Lenton may have just a few weeks rather than a couple of years to get his Dream onstage, but while he's clearly feeling militant regarding the Creative Scotland debacle he's also feeling decidedly chipper.

"It's a very pleasant relief after Wonderland," Lenton says of his tenure at the Lyceum on A Midsummer Night's Dream. "It's the Shakespeare play which as a kid I always found the most accessible.

I've always been interested in the magic and the darkness and the beauty of it, and it's nice to be able to spend time in such a different place. I've always had a difficult relationship with Shakespeare. It was certainly not something I loved as a kid, and not something I found easy, so I think for those reasons I found it a challenge for me to see what I could do with Shakespeare, but also to learn about it as well.

"I think sometimes when you watch Shakespeare onstage, the danger is you have these jaggly jawed actors speaking language. What we're trying to do is find the action in everything that's happening, so I think I've got a good idea and a good feeling for the kind of production I want it to be."

With this in mind, Lenton's Dream will be set in winter during a recession. Here a group of starving artists are forced to enter a Britain's Got Talent-style TV show to compete for success. How much of this is art imitating life remains to be seen.

Either way, with Creative Scotland's ongoing crisis unlikely to go away. Lenton is unabashed about taking a stand.

"I thought it was time for one of the companies to speak out," Lenton says of his statements to The Herald several weeks ago. "The system that exists with Creative Scotland isn't good."

Since saying this, inquiries into Creative Scotland's internal operations are pending following last week's public letter. Meanwhile, Vanishing Point have secured Creative Scotland project funding to develop a collaboration with the National Theatre of Scotland, and another with Brighton Festival. With Interiors about to tour to Moscow and Wonderland set for a second international life, all of this is some kind of vindication for Lenton's singular vision that looks set to be applied to Shakespeare. As Lenton sees it, it is all about gaining the confidence to stick to his guns.

"It's about following my impulses," he says, "and realising what I've got in my head is what I want to see onstage."

A Midsummer Night's Dream, Royal Lyceum Theatre, Edinburgh, October 19-November 17. Visit www.lyceum.org.uk.