Director Steve McQueen and Michael Fassbender reunite for a second outing in Shame, an intense exploration of inner-city loneliness, emotional replacement and sexual addiction; a masterpiece of restraint, cinematography and powerful acting which makes it not only one of the highlights of this year's London Film Festival but also one of the films of the year.

Michael Fassbender plays Brandon, a high-flying city boy who works and lives in New York. On the surface, he fits in, swapping banter with his colleagues and joining them in bar after work in which they drink toasts to "nailing it". But in a world where sex is almost a drug, Brandon's become completely hooked: scoring with prostitutes on a nightly basis, picking up women in bars, clogging his company laptop with gigs of hardcore porn, filling his closets with dirty magazines, masturbating in the toilets at work, staring unblinkingly at women he sees on the underground, his thoughts undoubtedly profane.

None of these things constitutes an immediate problem: Shame never judges - McQueen's lens is neither exploitative nor coy and Brandon's surface veneer of charm and civility actually makes him seem far more appealing than his sleazy and desperate boss David (James Badge Dale), who has no reservations about neglecting his family to pick up women.

But when Brandon's sister Sissy (Carey Mulligan) comes to stay, she disrupts his meticulous routine. She has no qualms about bringing David home to sleep with him - the noise causes Brandon to react both in disgust and arousal, sending him running into the night - a set up for a glorious tracking shot, one of the many stunning directorial flourishes executed by McQueen. It's the perfect metaphor for a particular kind of metropolitan loneliness: as we follow him down the street - lights, shops and people flash by in an instant - he's surrounded by people but always feels alone.

Brandon tries to start a meaningful relationship with a colleague but it fails when he takes her to hotel only to realise that he's recreated something he saw from the street one day, a couple having sex in window. That realisation hits him hard. His constant detachment and use of women as objects has ruined what could have been something promising and he is appalled with himself. He stops, unable to continue only to act out exactly the same scene with a prostitute later and although he gets immediate pleasure, he's filled with remorseful guilt.

Importantly Shame is not just about sex addiction. Brandon has an addiction yes, but it's more about replacement. Brandon uses sex as a way to cope, a way to control. Much in the same way that Patrick Bateman in American Psycho felt some sort of release from the ennui and contempt he feels towards his colleagues through murder, Brandon finds catharsis in sex constrained by routine.

Like Bateman, there's a sense that Brandon is a social chameleon - a man with a series of masks for different situations - charming flirt; aggressive pick up artist; apologetic wing man. But unlike American Psycho, there's no escalating spree of black humour or satire of yuppie consumerism to alleviate the tension. What there is instead is a complicated and resonant portrayal of intimacy, dissociation and alienation.

Michael Fassbender is an actor whose star is rising at an incredible rate and rightly so. He's given commanding performances in Andrea Arnold's Fish Tank, an animalistic Mr Rochester in Jane Eyre and showed how he could have easily pulled off James Bond given half the chance (X-Men: First Class). But it's in Shame where he really comes into his own. He's perfectly cast: he looks like he's going to bite every time he smiles; there's something dangerous, something predatory about him. It's difficult to imagine another actor (bar perhaps Christian Bale) in the role. As McQueen said in a recent interview, "I don't believe anyone else, but I believe Michael". How right he is.

Fassbender, while easily believable in any of the roles Brandon's created for himself shows through his eyes a tremendous, aching loneliness. There's a wonderful scene where Brandon indulges in an orgy with some hookers where McQueen frames his face in close up, a picture of both agony and release.

Carey Mulligan was the strongest thing in 2009's An Education for which she was deservedly lauded but her performance here is actually better. Sissy's relationship with Brandon is the backbone of the film and Mulligan deftly negotiates a character who is a psychological train wreck without descending into histrionics.

Unable to sleep one night, Sissy crawls into Brandon's bed. Instead of tenderness, he reacts with rage, but what is he afraid of? At other times, they wrestle on the sofa like kids, an eerily disquieting suggestion of sexual tension between them. There's nothing stated but often hinted at - has there been something between them in the past? Are they victims of shared abuse? McQueen wisely eschews direct explanation; he implies but never states. Instead he crafts lingering long shots which allow his actors to tell their stories with silence.

McQueen's direction is enhanced by some stunning cinematography from Sean Bobbit. From the previously mentioned long tracking shot of Brandon running at night, to an exquisite scene where Brandon waits outside an apartment, bathed in an artificial gold light but made to look so small in the frame, to the use of new, clean buildings which radiate emptiness - every shot is carefully chosen and composed.

Shame is a wonderful film - psychologically immersive and constantly engaging. McQueen has created a quiet, measured film where faces hide inner torments, where silence says a thousand words. The film’s explorations of intimacy in the void of the big city are as relevant and potent now as they've ever been.

Rating: 5/5