As conceived by Peter Wright, after the original book by Lev Ivanov. Herr Drosselmeyer (Anthony Dowell), a mysterious magician and creator of mechanical toys and clocks, was once employed at the royal palace, where he invented a trap that killed off half the mouse population. In revenge, the wicked Mouse Queen cast a spell on Drosselmeyer’s nephew, Hans-Peter (Ivan Putrov), which transformed him into an ugly nutcracker doll. The only way to break the spell is for the Nutcracker to slay the Mouse King and for a young girl to love and care for him in spite of his awful appearance.
When Drosselmeyer is invited to entertain the guests at a Christmas party given by his friends, the Stahlbaums, he decides that this could well be the opportunity he has been looking for. The Stahlbaums have a daughter, Clara (Alina Cojocaru), who is a little younger than Hans-Peter. And what better time than Christmas, when the mice are busy stealing the leftovers, for a confrontation between the Mouse King and the Nutcracker? Drosselmeyer decides to put the Nutcracker in the tender care of Clara and makes a special Christmas angel to guide her through her task.
When all the guests have departed and the house is asleep, Clara, in search of the nutcracker doll, creeps downstairs and discovers Drosselmeyer waiting for her. He draws her into his own special world of fantasy, where time is suspended, and exerts all his powers to transform the living room into a great battlefield. Then he summons the Mouse King (Christopher Saunders). In the ensuing fight between the mice and the toy soldiers, the Nutcracker slays the Mouse King, but only through the intervention of Clara, who, out of compassion, saves the Nutcracker’s life.
Restored to his real self, Hans-Peter dances with Clara, and they find themselves in the Land of Snow. Drosselmeyer then sends them on a magic journey to the Sugar Garden in the Kingdom of Sweets, where they meet the Sugar Plum Fairy (Miyako Yoshida) and her Prince (Jonathan Cope). Freed at last from his imprisonment inside the nutcracker, Hans-Peter recounts to the Sugar Plum Fairy his great adventure and how Clara saved his life. They then join in a magnificent entertainment put on by Drosselmeyer to honor them for their bravery.
Returning to reality, Clara runs out into the street in search of Drosselmeyer and encounters a strangely familiar young man, while back in his workshop Drosselmeyer prays that his efforts will be rewarded. His nephew returns; the spell has indeed been broken.