London has long been thought of as a magnet for malign foreign influences. In 1888, some Londoners maintained that Jack the Ripper wasn't an Englishman, but in fact a Chinese opium fiend or one of the American Indians performing in Buffalo Bill's Wild West Show. Bram Stoker imagined the British capital threatened by a wicked Romanian real estate tycoon in his 1897 novel Dracula. Modern-day villains from the East, more real and more vicious than their turn-of-the-century counterparts, menace London in David Cronenberg's new film Eastern Promises.

The movie, which opens in Russia on Thursday, won the audience prize for best film at this year's Toronto International Film Festival and has been warmly received by critics. Cronenberg is best known for intensely physical sci-fi and horror movies, such as his 1986 remake of The Fly. In recent years, however, the Canadian filmmaker has moved beyond those genres to direct psychological dramas including 1996's provocative Crash, about a group of fetishists who are sexually aroused by car accidents.

Eastern Promises begins with weary Russian midwife Anna Khitrova (Naomi Watts), a woman grieving for her father, a relationship and a miscarried baby. She finds her own misfortunes mirrored more severely by those of Tatyana, a 14-year-old girl from Novokuznetsk who comes into her care at a London hospital and dies while giving birth to a daughter. The girl leaves behind a diary of the cruelties she has suffered. Feeling herself "buried under the soil of Russia" after her father died, she fled Siberia for London, and fell victim to brutal Russian criminals who raped her, coerced her into prostitution, and forcibly addicted her to heroin.

Hoping to find the baby's relatives, Anna becomes entangled with members of a Russian criminal gang who run a London restaurant called the Trans-Siberian. Semyon (Armin Mueller-Stahl), the restaurant's owner, appears to be kind and helpful but is suspiciously eager to get his hands on the diary. Semyon's son, Kirill (Vincent Cassel), is vulgar and mean, entirely without his father's charms. Semyon's enigmatic limo driver, Nikolai (Viggo Mortensen), is a picture of exotic menace and a human tapestry of Russian prison tattoos.

Semyon and his circle, we learn, are sex traffickers, and members of the vory v zakone, or criminals in law. This Russian criminal group became established in Stalin-era prisons and had to compete for influence against a new generation of Russian mafia following the collapse of the Soviet Union - hence, perhaps, the group's presence in London. According to the "law" by which they live, a member's status is encoded in elaborate designs on his skin.

Nikolai and his tattoos are seemingly meant to embody Westerners' worst fears about Russia, and also the country's fabled mysteriousness. He is presented from the outset as the ultimate hard case - he cuts the fingers off a corpse before dumping it into the River Thames, and puts out a cigar with his tongue. He invites Anna out for a drink, and when she objects that everything's closed, he retorts, "Sometimes when things are closed, you just open them up."

Yet he also has a gentle side that is not for show. He gives a wad of £20 notes and an icon to a young prostitute, telling her, "Stay alive a little longer." Anna seems to sense that Nikolai, despite his wolfish exterior, may in fact be a man among wolves. She develops a nervous, sexually charged rapport with him.

A scene near the end of the film reveals the director's message about Russia. Slavery and Suffering, a stirring, traditional Russian song, accompanies shots of Nikolai stripping to reveal his tattoos before a panel of criminals in law, who subject him to a pseudo-Masonic ritual of induction into their upper ranks. The other end of Europe, Cronenberg seems to say, is a dark, exotic, opaque and terrifying place. In other words, he lays on the idea of Russia's essential wickedness a little thick.

None of the Russians in Eastern Promises is portrayed by a Russian actor, with an American, a Frenchman and a German in the lead roles. Although they all manage to speak Russian fairly competently, if sporadically, the sum of their efforts is a composite Russianness that will convince English-speaking audiences, but which risks causing real Russians to laugh in the aisles. The exception is Viggo Mortensen, who, he has said, traveled alone through the Ural Mountains before filming began. He immersed himself in Russian music and television and decorated his trailer on the film set with icons. Mortensen also gives Nikolai a wicked, and convincingly Russian, dark sense of humor.

Eastern Promises is not, on the whole, a convincing tale of Russian gangsters in London - the realities of the East European sex trade must be at once more terrible and more banal than anything Cronenberg depicts. But it is a highly artistic evocation of a particular modern fear. Cronenberg has metamorphosed over the years from a director of traditional horror films into an intellectual auteur whose films probe contemporary terrors. This film, which must have been in production before most Britons knew the names of Boris Berezovsky or Alexander Litvinenko, conveys something of the sheer dread some people seem to have of post-Soviet Russia.