If you were to take a group of creative artists and music-lovers, feed them acid and ask them to brainstorm their ideas for the best festival on earth, then you might get somewhere close to imagining the wacky carnival of 'Beats and Barminess' that is The Beat-Herder festival.

Born five years ago out of Bradford's underground party scene, The Beat-Herder is funded by an independent group of friends and held in the beautiful rolling hills of the Ribble Valley, Lancashire. With no corporate ties or commercial interests, The Beat-Herder sticks two fingers up to the big boys: this wacky jamboree hasn't forgotten its roots.

Diverse, vibrant and exploding with creativity, the only goal is for everyone involved to have a good time- and for a small back to basics festival, there's a million ways to do it. Meander around the eclectic array of stalls (including many fancy dress shops, ideal for Saturday's annual competition), play chinese whispers around the firepit, take advantage of the 'pimp your wellies' service, or chill out smoking hookah pipes and enjoying the acts in the Smoky Tentacles Shisha Lounge. Take part in an African dance or art workshop, challenge your mates to a space-hopper race, crawl on your belly through 'Granddad's tunnel', or try your luck on the bucking sheep rodeo.

You won't have to queue for 45 minutes to buy warm beer at extortionate prices in the main arena: feel free to take your own drinks through security, buy some cold cans once inside, or get a traditional pint in The Beat-Herder and District Working Man's Club (who wants beer tents when you can have a whole pub?) This authentic and reasonably priced watering hole had a 1940's theme this year, with a great variety of acts, comedy and entertainment, including bingo, a pub quiz, and not forgetting the annual 'Beat-Herder's got Talent' competition- judged by Corrie's Janice Battersby.

The Beat-Herder crowd is arguably the most eclectic and colourful mix of people in festival-land, and the beauty of this knees-up is that everyone- without exception- throws themselves wholeheartedly into the festival spirit: there's a whole lot of love going around and the party atmosphere is second to none. Unlike other festivals, the punters become part of the overall entertainment- a wander through the campsite means stopping off at friendly raves that rival those in the main arena, and in the campervan area you're likely to find girls selling vodka jellies and other such party treats out of the back of a 1960's ambulance.

At The Beat-Herder anything goes, and the wonders never cease. A highlight for me is John's snug, a tent decked out like an old lady's living room, complete with shabby sofas, bookcases and old paintings, with the DJ hidden behind what first appears to be a mirror. The main stage and the various tents dotted around the site offer something for everyone- folk, funk, reggae, psytrance, breaks, dubstep, techno, drum n' bass- but when the sun sets orange and purple behind the breathtaking hills, there's only one place to head for- the Toil Trees, a dreamy grotto of fairy lights, cool bars and banging tunes, where basslines wobble through the enchanted wood and the whole forest comes alive with magic.

Memorable acts this year included Erol Alkan, Dan Le Sac vs Scroobius Pip, Utah Saints and the hilarious Lancashire Hotpots, with a fantastic set from The Dub Pistols- 'bringing down the forest' for the final set of the weekend. Then there was Key-Lo and Sicknote, a little-known breaks act from nearby Todmorden making their festival debut. With the whole of Toil Trees bouncing and a reciprocal energy rarely seen (arguably one of the best crowd responses of the weekend) they really proved that you don't need big names at festivals to have a belting time.

There were, however, a few disappointing acts: a rather poor performance from Prodigy cover act The Jilted Generation for example, which left many punters questioning why the real deal weren't approached instead, and Laylo and Bushwacker's set didn't quite live up to the hype. Andy C's set in the Stumblefunk tent, on the other hand, proved so popular that a one-in one-out policy had to be adopted, leaving many punters annoyed.

Perhaps the biggest drawback of The Beat-Herder is that there is a complete shut-down of the site at midnight on Sunday, when most people are just getting into the party spirit. In addition, 3500 extra tickets on sale this year meant cattle-market style security barriers that have been absent from previous years, and as a result of this (plus stricter searches and bigger queues) many Beat-Herder regulars complained that the festival was heading towards the slippery slope of commercialism.

But this remains to be seen, and for the moment The Beat-Herder retains its charm and sticks firmly to its underground roots. It still has style, soul and plenty of substance sorely lacking at the bigger festivals. The Beat-Herder is the Alice in Wonderland of summer events, a teddy bear's picnic for grown-ups, a melting pot of insane theatre, mad shenanigans, wonderful nonsense and the best music you'll find at any dance festival.

At five am, when a beautiful lake of mist gathered eerily in the valley beneath nearby Pendle Hill- famous for its legendary witches- I began to think The Beat-Herder must have soaked up some of this ancient cosmic energy for itself.