Well, it had to happen. Madonna has been a terrible actor in many, many films and now - fiercely aspirational as ever - she has graduated to being a terrible director. She has made a movie so incredibly bad that Berlin festivalgoers were staggering around yesterday in a state of clinical shock, deathly pale and mewing like maltreated kittens. She is also the producer and co-author of the script. If she'd done the location catering as well, they'd have had a Jonestown situation on their hands.

Madonna has made a dumb and tacky comedy-drama about three people sharing a flat in a quaintly conceived "London" and her conception of super-cool streetwise reality is so clueless it's as if Marie Antoinette had made a film about cake-munching peasants. One of her characters is a pill-popping pharmacy assistant; one's a wannabe ballerina forced through poverty to work at a lap-dancing club; and the third is a Ukrainian punk-poet who earns a few bob humiliating masochists while wearing ex-Soviet military garb in his ratty bedroom. This last is played by Eugene Hutz, who does occasionally raise a smile, but everything else is a mess.

Madonna's script is a nightmare of crass and fatuous stereotypes: south Asians, Jews, gays - no one escapes her lack of insight or common sense. Despite living in Britain for many years, she has only the sketchiest notion of what the place is like. Her film reaches a Zen state of pure offensive awfulness when the lap-dancer's mentor comes round with a gigantic wad of £20 notes. This was her "tips from last night". Her "tips"? From "last night"?

Perhaps Madonna really does think that this is what lap-dancers make in a night. Or perhaps it's what she thinks they ought to make, or what they'd make if she was playing a lap-dancer in her acting pomp, the 80s era of Desperately Seeking Susan, whose picturesque vision of Bohemian life this film faintly and tragically recalls. Oh dear. How is it possible that the exhilaratingly talented star from that time has dwindled to such a dullard?

· Peter Bradshaw is the Guardian's film critic