Take it from us: Nicole Kidman and Ewan McGregor are the hottest screen couple in the sexiest film you'll see all year. Elle spoke to the stars of Moulin Rouge about corsets, chemistry and doing the cancan. Sydney, Australia. In a beautiful room in an eccentric, rambling Victorian house, a boy and girl have only recently met and are quite shy of one another, but, as Nicole Kidman recalls, 'It was magical when you look back on it. I remember it being quite balmy…'

At the director's request, Nicole sings Nobody Does it Better from The Spy Who Loved Me. 'It didn't make it into the film obviously!' She shrieks. Ewan McGregor, for he is the boy, is asked to sing Cat Stevens' Father and Son. He recalls feeling almost naked. 'It's exposing, singing-especially if it's just two of you in a room with a director. We were giggling and laughing and being embarrassed, so we just decided that, as we were going to have to kiss and dance and do physical comedy, we would make a pact not to be embarrassed with each other,' explains Ewan. 'We would just allow each other to be as crazy as we wanted to be.' Which is how, dear readers, Baz Luhrmann auditioned and found the first great screen lovers of the 21st century. Moulin Rouge, Luhrmann's romantic, bohemian, musical epic Starring Nicole Kidman and Ewan McGregor, high-kicks its way into British cinemas on 7 September.

The third film in the Australian director's archly theatrical 'Red Curtain' style, Moulin Rouge-with its swirling, techno camera moves, colours that blaze as though viewed through an absinthe haze, and sexy, thumping 'hip-hop vaudevill' soundtrack-is his most seductive yet. The action takes place in the notorious Montmartre nigthclub, depicted as a kind of 19th-century version of Steve Rubell's Studio 54, 'where the rich and the powerful slum it with the young and the beautiful and the penniless'. Absinthe and knicker-flashing cancan replace cocaine and disco-dancing as the thrills du jour. Kylie makes a fleeting appearance as the green fairy of the absinthe bottle, looking like Tinker Bell crossed with a Vargas pin-up girl. Tattooed butch clones and saucy painted ladies rave on down as Lady Marmalade, sung by Christina Aguilera and Li'l Kim, segues into Nirvana's Smells Like Teen Spirit.

And At the heart of these carnivalesque exotica is the tragic story of Christian, a naïve young would-be poet, who ventures into the Parisian underworld only to fall in love with an exquisite but doomed courtesan, Satine, a woman who sells love for diamonds. Luhrmann knew that the key to casting his magnificent romance lay not simply in signing up Hollywood's most fabulous beauty and then filling in the gaps. ( I did see just about everyone for this part: you would be surprised by how many actors are dying to sing.) It had to being with a couple whose love story people could believe in. He first sensed that Nicole could be half of his magical pair when he caught her on stage in London in Sam Mendes The Blue Room. He sent a box of long-stemmed red roses to her dressing room the next day with a note that read, "She sings! She dances! She dies…"

As for Ewan? The Scottish actor had auditioned well for Luhrmann's Romeo & Juliet and had other singing and dancing credentials. See: charming karaoke routine with Cameron Diaz in A Life Less Ordinary, his fabulous bum-baring, willy-waggling Iggy Pop turn in Velvet Goldmine. Even his very first job in Dennis Potter's Lipstick on Your Collar showed how nicely he could pull off a 40's dance routine, thank you. What happens when you put Ewan and Nicole together on screen is doubtless enhanced by their 'no embarrasment' pact, four months of rehearsal that pummelled every last drop of inhibition out of their exhausted bodies, and good old- fashioned chemistry.

When the pair met again at Cannes, where our pictures were taken, the giggly affection between them sent the gossipmongers on the Croisette into a frenzy of speculation that they'd had a love affair on set. People ask if anything happened between Nicole and Ewan,' says Baz Lurhmann when asked about it straight. 'I say, only in the natural romance that comes from doing the scenes. And it was very romantic to do those scenes.' The Hotel du Cap, Cannes. It is the morning after the premiere of Moulin Rouge after Nicole Kidman danced on her chair at the after-show party and larked about in the DJ booth with Norman Cook. It is also, lest we forget, little more than three months since Tom Cruise filed a petition for a divorce from his wife of nearly 10 years, and still less time since she suffered a miscarriage. These two incontrovertibly life-shattering episodes make Nicole Kidman's presence at Cannes so hypercharge it's hard to believe she pitched up at all, never mind how cheerfully she bopped along to Rhythm of the Night, or how she flouted every jot of Cannes protocol in the book by casually alighting from her limousine early and ambling to her premiere in her very serious Tom Ford-designed YSL Rive Gauche dress, with diamonds hanging from her ears like chandeliers, because she felt like walking. 'I just remember being a kid at the airport when Abba came to Australia, and they didn't stop, they just drove right past, and I thought, "Aw. I've been waiting for ages," she laughs. 'It's nice to get out and talk and sign some autographs. People are very warm. I enjoy getting out there and saying hello and remembering what it was like for me when I was 14."

In the flesh, Nicole is absolutely nothing like the stately, brittle diva she sometimes seems, caught in the gaze of the paparazzi, towering above her ex-husband in redcarpet gowns. Today, sitting with her long Bambi-ish limbs wrapped protectively around her, she is more girlish and informal than she appears in photographs. She is dressed in an antique turn-of-the-century cream lace blouse and a Marni jacket she has clearly owned and loved for a couple of years. Her hair is fixed in a ponytail with pretty fabric flowers, and her shoes have been kicked off and lost under the table. I'm actually really surprised by how little- and I'm really grateful about how little-I have been asked about the divorce. I've declined to answer a lot of stuff. I just don't want to get into it, the legalities of it and the privacy issue. I've not made any sort of comment publicly; I've just not gone into it. I don't think it's the right place to be talking about it. It's between me and Tom and the kids, ' she sighs. (She and Cruise have two adopted children, Isabella, 8, and Connor, 6.) For all her people-pleasing walkabouts, the photo ops and the ease with which she accessed her inner teenage Abba fan, the Cannes experience has been 'a bit weird'. Last night's premiere was 'the first time I've done that alone. I'm usually with, you know…'and she stops. As if we didn't.

As for the career implications of playing in an all-singing, all-dancing superstar showgirl? Nicole has certainly surprised us all before…going naked on stage in The Blue Room (Little Miss Theatrical Viagra), sharing a jazz cigarette with her ex in Eyes Wide Shut, seducing a very rough-trade Joaquin Phoenix in To Die For. 'I don't like to play it safe…It's not unusual for me to be in a film that has an extreme reaction,' she laughs. However, Satine is easily her most sophisticated creation to date. Not only did she have to sing, dance, swing on a trapeze and quite literally throw herself into quite some fabulously bawdy screwball comedy love scenes (She grabs Mr McGregor by the crotch! Humps a fur blanket! Sorry, we're spoiling it for you.) She also had to embody Baz Lurhmann's awesome vision of a 19th-century Parisian courtesan, 'an incredibly iconic Marlene Dietrich in The Blue Angel meets Monroe meets Madonna…'According to Luhrmann (Who could probably nominate Exotic Ladies Who Sell Love as his specialist Mastermind subject) 19th-century Parisian courtesans were 'the rock stars, the supermodels, the superstars of their day' girls whose idea of entertainment was to throw the diamonds they'd extracted from their rich clients into the fire to watch them burn. For Luhrmann, Satine had to be 'like a caged movie star who sells love, but in her heart that character is the girl next door'. Challenging. 'Baz wanted some of my gawkiness to come through a little,' Nicole smiles. 'In terms of the physical comedy. He just liked the juxtapostion of these long arms and legs that I have, which sometimes I'm a bit awkward and clumsy with. He would just draw this gawkiness out out of me, even though I was in three-inch heels and corsets.

Which brings us, amid a few grimaces and eye-rolls, to the C word and how, while Moulin Rouge looks set to spark the biggest revival in foundation garments since Dior's New Look, Kidman has developed an aversion to the coming season's most fashionable garment. "Corsets are very hard to dance in, ' she beings diplomatically (her favourite of Satine's outfits was the simple black dress with long elather gloves, and she had no argument at all with her vampish-fishnets). 'You are not meant to dance in corsets. All the dancers were complaining about how you couldn't move in them, but Baz would want you crawling on the floor, throwing yourself on the ground. And I would be like, "Ok, Ok. I can do it. I can do it."

It was an unlucky combination of corsetry and extravagant dance moves that caused Nicole to break her rib, not once, but twice on the set of Moulin Rouge, setting filming back six weeks. 'Basically, Ewan was the one that broke my rib. We were doing a dance move that we practised over and over. He bashed into me and, although I only slightly cracked the rib at first, they then put me into a corset and it cracked fully.' More seriously still, in the final days of filming, Nicole fell downstairs in heels, badly damaging the cartlidge in her knee, and was forced to shoot the final scenes of the film on crutches and pull out of her next project, The Panic Room, altogether. 'Being Australian, I like to think of myself as physically quite tough and like I can push through. I think women tend to be quite strong like that with pain,' she says, with a half smile that seems to say that ribs and knees can at least be mended. 'I look forward to winding down,' she smiles. 'I've spent a lot of time just with my kids and my family recently, and I look forward to doing that again.' And, with this, it's time to gather up her things, say her goodbyes and get back to Los Angeles to face more press engagements and goodness knows what development in the divorce proceedings.

Outside on the terrace, I find Baz Luhrmann, who's squinting in the Riviera sunshine and thinking about his leading lady. 'It's paradoxical, because Nicole's one of the strongest persons I've ever met and also the most vulnerable. I asked her to follow me, to sing, to dance, to run around going, "Wup! Wup! Whup!, make a complete idiot of herself and give up many other opportunites. The balls involved with doing that is real,' he says seriously. 'I can tell you, this woman has guts, as we say in Australia, She has guts.'

London, England. Ewan McGregor (whose favourite of Satine's outfits is ' the black suspenders one, of coure, of course!') says he's never been to a club as divinely decadent as Baz Lurhmann's Moulin Rouge-well, unless you count Heaven in London, which he went to when he was 18 because his girlfriend at the time had a gay best friend. 'It was a real eye-opener. It used to be a mad place, but I stopped going when they opened a lesbian room and they wouldn't let me in. I thought that was fiercely unfair!' he laughs heartily. Weeks have passed since the Cannes premiere of Moulin Rouge and Ewan, in a buzz cut and a rugged tan, both souvenirs from his most recent film set, Ridley Scott's Black Hawk Down in Morocco, has the air of a man who has come home. He looks thinner than he's looked recently; more like Renton, the skinny Trainspotting whippersnapper with whom he made his name, than the dark-haired matinee idol he plays in Moulin Rouge. The voice, however, is the same- dulcet-toned, Scottish as shortbread and, for all his cheekiness, almost absurdly romantic.

He sparks up a cigarette and explains that Moulin Rouge is the most important film of his career. 'I have never invested more of myself or my passion into anything. I've been pushed places I've never been before as an actor. I love it so much and it means so much to me that I don't want to hear if somebody doesn't like it. The crazy thing is, he nearly didn't take the job. "I wasn't going to do it. because they really didn't pay us anything. That wouldn't bother me normally, apart from the fact that I had to move my family and my whole life to Australia for almost a year, because I knew that Star Wars was going to come in straight after it. You heard all these stories about actors in the States being paid ludicrous amounts of money, and I wondered when it was going to start happening to me." He signed up in the end, of course, for 'scale' (actors minimum wage) and threw himself into Baz Luhrmann's world with gusto. He sampled absinthe with the cast and crew. "Twice. Something I'll never do again. It gets you absolutely gutted. The next day, my vision was vibrating, everything was shaking from left to right and I couldn't see a thing. He partied at Sydney's Mardi Gras. "I went bananas at it. I went head-to-toe in leather and wore full drage make-up, kind of reminiscent of Velvet Goldmine, and screamed around with my wife and my brother and his wife.

And when the hot-house craziness of the Moulin Rouge set became to intense, he simply acquired a Harely-Davidson, bought a tent and "****** off " into the outback for five days. "It was fantastic." Luhrmann's circus-school-like rehearsal process clearly suited him to the ground-four months of workshops, singing (which he loved so much it felt like 'swimming naked') and cance class, although in truth he didn't find this last quite so exhilarating. "You just have to do it over and over and over again, and you go through a boredom threshold, which reminded me of being in school, sitting in physics or something. There were days when you just wanted to call in sick. Nicole and I both did throw sickies on a couple of occasions and just didn't go in. Ha!" McGregor admits that he was madly intimidated by Nicole at first, and while he also felt the magic in the air on the first day when they sang together, he'd also got it into his head that she was looking into his eyes and thinking 'Why the hell has he got this part?" 'It's funny, she's one of those actresses whom you're slightly in awe of anyway. You imagine her as the movie star from the front covers of magazines, that she's untouchable and that somehow gets in the way of her being human and funny. But she really is good fun, Nicole. You meet her and discover she's just funny and girlie and all nice things."

They got on famously. 'She's really giggly and you can make her laugh. A lot. I'd be very rude in front of her, swear a lot and belch, and she'd say, "Ew-an!" Like a big sister with her younger brother. We had that sort of relationship where I would constantly be embarrassing her. But I used to play on it, and it amused me that this was Nicole Kidman and I could behave like this in front of her. At one point, we were discussing the romance in the script and I said, 'What you've got to remember always is that she is just a skanky old whore.' That was an interesting moment, because I didn't know how that would go down.' He drags on his cigarette. 'But it went down very funnily, so I would remind her about being a skanky whore constantly.' On his last da in Cannes, When Ewan said goodbye to Baz Lurhmann at the Hotel du Cap, he found himself crying. He admits that he'd be gone to Australia thinking Moulin Rouge would be a light musical and they would just knock it out. 'But it turned out to be a weird one, the length of time it took and what happened to everyone in that space of time. I didn't expect it to be so emotional or for it to cost so much to do emotionally.'

Nicole's injuries and subsequent marriage break-up have been documented, as has Baz Luhrmann's grief when his father died of skin cancer on the first day of filming. But what happened to Ewan? The emotional depths you have to go to, the way Baz pushes you it's all heartfelt. It's exposing. It's quite naked what I'm doing on screen. It's so kind of innocent and truthful, and it costs to put that out, I guess. Also the rehearsals and shooting took nine months. That's a long time…you lose sight of friends, family; you lose the plot.' And now Ewan is getting used to the feel of home soil beneath his feet. His wife, Eve is expecting their second child in October. 'I just want to sit with Eve and my daughter Clara at home. Things are good and we are having a brilliant time, and Clara…I can't tell you, she's just a fantastic wee girl and we have such an amazing time together. It's hard being a dad anyhow, and it took me quite a while, because I was working all the time and I would always feel like I was fitting back in, but now I'm there with them and things couldn't be better.

We're having a baby in October, another wee girl, and I can't wait. It's such a good time.' As for his Moulin Rouge muckers? Richard Roxburgh, the Australian actor who plays his love rival, the duke in the film has just moved to London and slotted in nicely with the McGregor social life. 'Thank God!' He's fun to have around, Roxburgh, he's a very bizarre man.' And he refuses to believe that Baz Luhrmann won't always be inhis life in some way. "You can't be that close to someone and not stay in touche. He is very busy. I heard rom him when he needs me to do publicity, but I'd like to hear from him for other reasons as well.'

And Nicole? 'I'll get in touch with Nicole now and again. Definitely.' He grins. 'Because she's a skanky old whore and I love her for it.'