Ang Lee’s Lust, Caution is quietly mesmerising. With its dark, sleek, fugitive grace, it is like watching life reflected in the bodywork of a polished Rolls-Royce. Everyone is on the move in this tale of conspiracy in Japanese-occupied China, where a pretty girl (Tang Wei), working for a radical group of students-turned-actors, sets out to seduce and prime for assassination a VIP collaborator (Tony Leung). At the same time, Lee’s second Venice Golden Lion winner in three years (the first was Brokeback Mountain) is a glacial film noir, an icy slab of history (1937-42) that freezes people in consecutive poses – courage, imposture, desire, despair – as if still awaiting the animating purr of the projector.

Just like Brokeback Mountain, another tale of doomed romance drawn from a woman author (here it is China’s Eileen Chang), Lust, Caution is about people caught in a vice between the ecstasy of love and the agony of moral choice. Lee has a wonderful new actress in Tang Wei. Her demure prettiness a little louche about the mouth and jawline, she is a doll who can also be a slut. This spy-conspirator falls helplessly into the trap of the sadomasochistic raptures her victim/lover lavishes on her in extended scenes of eye-popping, graphic sex.

Largely shot in a studio, the film is a hothouse fantasy of 70-years-ago Hong Kong and Shanghai, as airless as Brokeback Mountain was open-range. But claustrophobia is the point: everyone is trapped, the plotters and plotted-against. Sex is narcotic chamber music, for two players and no audience (except us). Murder must be noiseless, furtive and brutal, as in the gang’s improvised killing of a potential whistle-blower (very Torn Curtain). When the group takes a rare trip to a deserted beach for shooting practice, the light and sea air go to what is left of their brains – “We’ve got the guns, why don’t we shoot a couple of easy targets before school starts?” – and the film hints at the anarchy lapping at these ideologues’ lives.

In the city it is always dusk or darkness, as swish cars swish from the colonial drives or street trams carry their freight of anonymity-hugging schemers. Lee has an extraordinary talent for qui vive watchfulness in close-ups. The film’s impassive faces will always, at some point, open a trapdoor into self-revelation. The darker the film gets, the more poignant these points of light or epiphany.

It’s a classic plot: love versus political loyalty. Imagine Aida and Notorious thrown together in a shaker, the final cocktail blending period exoticism with tenebrous tension and mordant nihilism. The ending is bleak indeed: those who live by mendacity will die by it. Only in a world where cruelty is for consenting sensual play between adults, not coercive historical destiny, can love and freedom exist for those who want both, with or without a twist of the perverse.