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Martin Scorsese is the best director in the world ever - FACT. Brutal, compelling and unflinchingly violent, his films offer grainy snapshots of the mean streets of gangland America that are gritty, often gruesome, and liable to print themselves indelibly on the memory. And in 1990 he made the perfect film: Goodfellas, his brilliantly seductive, glamorous yet sordid biopic of the rise and fall of the gangster Henry Hill and his Mafia associates. Since then, there simply hasn't been a film made that can match it. And that includes The Departed - although director and cast give it a damn good shot.

Leaving behind the Italian Mafia (in a shallow grave, as it happens) Scorsese moves his attention to the Irish gangs of Boston. Based on the Chinese cop thriller Infernal Affairs, The Departed presents us with the traditional war between cops and robbers but gives it a new twist. 'When I was your age, they would say you could become a cop or a criminal,' says ruthless gang boss Frank Costello (Jack Nicholson). 'What I'm saying is this: when you're facing a loaded gun, what's the difference?' And when good guy from the wrong side of town Billy Costigan (Leonardo DiCaprio in excellent mode, thank God) goes undercover to infiltrate Costello's gang, only to find himself pitting his wits against Costello's own mole in the police force, Colin Sullivan (Matt Damon, giving the performance of his career), he soon discovers that there is very little difference between the underhand methods employed by the police and the strong arm tactics favoured by their gangland counterparts. Either way, it's shoot first, ask questions later - and believe me, a lot of people get shot.

Like Donnie Brasco, The Departed portrays with searing clarity the torn loyalties and loss of identity involved in going undercover, the sense of constant extreme danger, as likely to be betrayed by your own side as the opposition - if you can still work out which is which, that is. But as the lines between good and evil become increasingly blurred, Scorsese does (for once) resist the urge to glamorise the bad guys - there are no rows of expensive designer suits in Costello's wardrobe, just a series of horrible checked suits that went out of style in the late '70s and a leopardskin dressing gown so nasty even I wouldn't wear it.

Sexist, racist, foul-mouthed and barbaric, the seventy-year-old mob boss is the most outrageous, over the top character Scorsese has ever come up with, and he's brilliantly but repellently realised by the mighty Jack Nicholson. With his wild hair, lunatic sneer, crude one-liners and bloodstained hands, he makes Jake La Motta seem positively benign, and if he has a single redeeming feature, it's very hard to find it.

Over on the other side of the wire, we have plenty of good cops to balance out the bent ones, in the form of everyone's favourite President, Martin Sheen, as the fiercely upright Captain Queenan, who, together with the foul-mouthed Sergeant Dignam (Mark Wahlberg, also excellent) runs the secret undercover operation. And somewhere stuck in the middle is police psychologist Madolyn (newcomer and SJP deadringer Vera Farmiga), who unwittingly finds herself caught in the crossfire between Costigan and Sullivan.

The Departed is undoubtedly a cinematic tour de force, with a masterful director marshalling a top drawer cast, some stunning camera work and, as you'd expect, a sterling score - who else but Scorsese would set a sex scene to the tune of Pink Floyd's 'Comfortably Numb'? It's also probably one of the most stressful films I've ever seen, so riveting, horrific, uncompromisingly violent and horribly inevitable that it actually made me feel a bit ill with nerves - but believe me, it's worth the pain. Scorsese recently said that he thinks The Departed might be his last movie. If not, one's thing for sure: it'll be a damn hard act to follow.