Vodka at 20 pence, tequila at 50 pence, bottles of lovely beer at 60 pence, Teenage Fanclub on the stage and it's all in the name of "art" - it really doesn't get any better than this. We're still in Edinburgh (where else?) taking in the fantabulous new festival within a festival called Flux. And believe me, there's a lot of lessons to be learned - not least by the suits (and dresses) at the Arts Council in Merrion Square, whose idea of culture seems to be as narrow and restricted as their sense of humour.

Here's a blueprint for them as to how they could irreversibly change the position of music within a festival context, and it's taken word for word from the Flux organisers. As you're no doubt sick of hearing by now, the Edinburgh Festival is the biggest cultural pig trough in the world but there was always a chasm-sized gap when it came to its coverage of contemporary music, which was for many a year confined to godawful Scottish "traditional" music (does the name Runrig ring a bell?), some very sad English folkies in faux Aran jumpers doing twee covers of Ewan McColl songs and the odd, Philip Glass wannabe type who would demand a grant for banging drum lids together on stage.

All changed, changed utterly this year when the Flux people decided to singlehandedly update the musical programme by taking over a 1,000-person capacity venue in the centre of the city called The Jaffa Cake (yes, I know) and putting on a very groovy, and indeed very eclectic line-up.

First out of the blocks was a one-off collaboration between our own Divine Comedy and one of his biggest musical influences, Michael Nyman. Basically this had Neil Hannon interpreting some of Nyman's most famous soundtrack work from The Draughtsman's Con- tract and The Piano while Nyman wrote a new work specially for Neil to perform. They won some big posh award for their efforts as well.

Glossing over the exuberant power pop of The Wannadies, the quite good indeed ska/jazz/ reggae beats of Jazz Jamaica, the idiosyncratic Babybird and local heroes Urusei Yatsura, it's on to Tindersticks whose introspective, nicotine-stained melodramatics were one of the highlights of Flux. It was the band's first-ever Scottish gig (they've played loads of times in Dublin) and the Jaffa Cake rose up to acclaim them as one. Spookily wonderful.

On the Krautrock side of things, Faust mixed industrial noise with ambient soundscapes, jazz harmonies with rock rhythms and a lot more besides. Called "the greatest band ever" by Krautrock connoisseur Julian Cope, the 20-year-old band showed that they could be as innovative and inventive as ever and listening to their cold, sterile but strangely affecting music you could only come to the conclusion that this is the music that Orbital et al spent their teenage years listening to. I didn't go to Heaven 17 because I don't like them, and for the same reason skipped the Midge Ure gig, but was all present and correct (and two hours early) for the closing gig of the inaugural Flux which featured the almost-local heroes, Teenage Fanclub.

There was a moment during their set, when they were playing Take The Long Way Home from the new album and recreated the three-part harmony break halfway through the song so perfectly, live, that it earned them a standing ovation in itself - it was that sort of gig. And when they came back for an encore they did Alcoholiday, Starsign (only one of the best songs ever written by anybody) and, as a nice surprise, finished with a rare performance of their first ever single on the Paperhouse label, called Everything Flows. Splendid.

Add in the Scottish indie nights, the dance nights and everything going out live on the Internet for those who couldn't squeeze into The Jaffa Cake and you're looking at a contemporary music festival that is going to run and run and get bigger and bigger. Partly funded by the Scottish Arts Council (are you listening, Irish Arts Council?) not only was Flux a whole lot of fun but it also managed to diversify and strengthen the festival proper. The idea behind it all, as one of the organisers told me, was simply to fling more culture on to the Edinburgh bonfire, then strike a match and light a big fire.

Get to it, Dublin.