So This is England is over again. For three luminous, heart-wrenching nights, the lives of Shaun, Woody, Lol and the crew completely transformed the mood and quality of advent TV, giving us a break from the mawkish seasonal "treats" we're more familiar with.

Shane Meadows' semi-autobiographical series has become known for its gritty realism, its grasp on the dank, cold colours of crumbling council estates, but also for the warmth of its brilliant cast.

Interestingly, capturing the feel of these places and these lives has been as much about technology as it has about Meadows mining his own childhood and teen years for inspiration. Behind the scenes, This Is England charts how Meadows has struggled with budgetary limitations throughout his career, and how the digital revolution has allowed him to revel in his own style of filmmaking.

I met Meadows back in April, when the current series was still being filmed. We sat in the brilliantly chintzy front room of a large semi-detached house, set to be the venue of a student party. It's also where Shaun is offered his first and probably last ever olive by the over-ingratiating dad of his new middle class college mate.

"It spins back to some autobiographical stuff, from when I first went to college," Meadows expains. "I started to break away from that gang and went to further myself, if you like. But Shaun only went to study drama because there was a ratio of 13 boys to 16 girls, and two of those boys were gay.

"So, one alpha male and loads of girls. Which is based on my own story. I got access to this whole other world. I was going to houses like this, I had all these mates in Uttoxeter – it was the first time I'd ever seen a fucking chicken kiev."

This is England 88 has been made entirely with digital cameras – and for Meadows, that hasn't just been about money, it's been about creative emancipation. When he started making shorts in the early nineties, he was using cheap home video cameras rather than film, and came up against a barrage of snobbery.

"I went to a film club and said I want to submit my tape for a competition," he says. "They asked for a 16mm print, and I asked, 'what's that?' and handed them a video cassette. They said, 'no, we only screen film'."

Unperturbed, he arranged his own festival, hiring out a local porn cinema as a venue. "It was only on a very small scale," he says, "no fucker was flying over from the States to see it. But we were quickly over-subscribed. It turned out there were loads of people making videos and there was nowhere to get them exhibited. There were only 15 seats in this old porn cinema and 80 people turned up, so we had to run the same tapes about six times."

While home camcorders were cheap and light, what they produced always looked like video – it was unavoidable. But as digital cameras first started arriving at reasonable prices, Meadows quickly found that the footage they produced was more malleable, and closer in look to film.

"The dream was a 35mm chip in a camera I understood," he says. "I wanted to be able to have that quality without bastards telling me that it's not achievable or affordable. And that's only just happened with digital really.

"So for the first time ever, I am able to bring my own personal camera on to set. I've been shooting alongside the Red cameras, which, once you start adding all the bits to them, are very expensive and very cumbersome. It's like what happened with music 10 years ago – you didn't have to go to a studio any more because you could get 32 tracks in your bedroom for a couple of hundred quid. That's coming in to the film world."

Another benefit, of course, is that there's no film to develop. Meadows shoots a lot of footage; he allows long languorous takes to extract every ounce of emotion from intimate scenes, and he films all his rehearsals with the actors, just in case there's a spontaneous, irreproducible moment of brilliance that would otherwise be lost forever.

The day before I visited the set, he shot four hours of footage, experimenting and messing about with the cast, developing scenes on the fly. "With my movies in the past, I couldn't really go beyond two or three takes, because it was so expensive to develop the materials," he says. "I improvise everything, but the 20-30 minute takes I wanted were impossible on film. Ten minutes was the maximum."

"And we were always under financial pressure," says Mark Herbert, Meadows' longtime producer. "There were always people on my back, and then I'm on Shane's going, 'you'll have to cut down on the film stock, it's costing too much'. Those conversations just don't happen any more.

"Right now, Shane is in the house, rehearsing with his actors. We're not watching it, but he gets the scene working – just about. Then we go in, the director of photography does his thing, and we can just keep shooting. There is no mag changing and all that – we're shooting considerably more material than we did on the first This is England."

There's also that quality, of time and subtlety, that have made, say, the quiet, harrowing scenes between Woody and Lol more moving.

"We can be much more intimate," says Herbert. "We can be really, really close; there's no one shouting, come on, we've got to move on. Also, we have a guy in a van checking the footage: you can just go, 'did that work alright?', and he'll come back five minutes later and say, 'yeah, it's all fine, the focus was fine, we didn't see that satellite dish'. So you know you can move on; you're able to get more footage."

This Is England 88 was jot on digital cameras

Keen to mess around with the possibilities of digital movie-making, Meadows gave every cast member a Sony Bloggie, a tiny camcorder that looks like a mobile phone but shoots in decent HD. The idea was that they'd produce lots of behind the scenes material, which could then be used as teasers, or as extras on the DVD release.

The cast embraced the concept wholeheartedly. Andrew Ellis, who plays Gadget, is a tech-fan who has been recording non-stop. George Newton, who plays Banjo, took the camera and filmed himself having a gold tooth fitted. There was just one rule. "I've introduced a £1,000 fine for penis shots," says Meadows. "And if they put their willy on someone else's phone, we'll have to do a line up – that'll be a double fine. Actors are very cunning, they're very deceitful people."

But there are also serious creative possibilities here. "It comes down to this lovely freedom that musicians have always had," says Meadows. "They can write and experiment with their songs on an acoustic guitar, and there's a purity to it that's better sometimes. But as a filmmaker, it used to be that you'd shoot on ropey 8mm or Hi-8 and it never really showed your talent. Now, I shoot a lot on phones and Bloggies, because they're always to hand, they're always in your pocket.

"I've been going through ideas with Mark. I don't think we're far away from a film being made on one of these £100 buy-at-Currys jobs. What happened with the Blair Witch Project is only a step away from shooting a movie on a phone, and getting it released. Obviously, you have to be realistic about your subject matter – you couldn't make Star Trek on one."

At the close of our interview, we wandered outside into the front garden, temporarily a mass of trailing wires and camera equipment. It was here a few weeks before filming, that This is England 88 took another of Meadows' apparently typical last-minute narrative detours.

"As we were walking down the drive, there was this contraption that the house owners had dumped in the garden – it looked like a robot out of Star Wars," he explains. "It was actually this old one-man sauna. And it made me completely change the basis of what the family were and how the party scene would work.

"I wanted the whole thing to open with this queue of lads, tops off, shouting 'hurry up, you dirty bastard!' You think they're all waiting to have sex with the same person, but when the door opens, Gadget's in the sauna, his head above the parapet.

"So yes, I wrote the script, but then I turned up on location and just went, 'fuck me! Right, the mum's going to be a beautician!' The whole casting and everything changed based around someone leaving this bloody dirty device in the garden!"

This is England 88 can be watched now on 4oD.

Filming for (almost) nothing – the Shane Meadows process

Meadows shot This is England 88 mostly on a Red, a high-end digital camera used extensively throughout the movie industry. But he also has a much cheaper Sony PMW-F3 handheld.

"I'm not really one for bells and whistles," he says. "I want a camera that's great in low light so if I've not got a crew I can still make something with my mates. If I want to make something like a Le Donk and Scor-zay-zee, I can take that camera and shoot it. Here, we're adding £15-20,000 lenses with matt boxes and a little screen. But I can take all that off, get an adaptor put a Canon zoom on it and shoot at no cost."

The whole post-production experience has also been demystified in the digital era. Meadows complains about going to colour-grading labs in the nineties and being told the look he wanted for his early movies wasn't achievable.

"With film, you used to get your look through lighting," he says. "Now, you do that a bit, but you try to get everything quite flat – your black levels are low, your whites aren't peaking – so when you get to the grade, you master the look afterwards. That was an alien concept 15 years ago.

"The DoP was having to burn the look into the film really because the twats in the lab were no help. They'd just go, do you want it to look warmer or colder? And I'd say, it's not a fucking central heating advert!'. That was their basic range. I asked if they could add more contrast and they'd say, 'It's impossible, what are you talking about" Three or four years later everyone's doing it and those people lost their jobs."