Under the gilded dome of Leighton House's Arab Hall, lined with exquisite blue and white Islamic tiles, a violinist riffs themes from Rimsky-Korsakov's Scheherazade. She is accompanied sporadically by a tabla player. A veiled woman nervously weaves between the guests, watched from afar by a severe-looking man in a black silk tunic. A storyteller appears on the staircase to summon the “true believers” and we traipse upstairs to take our places for a new work, presented by Opera Vera in collaboration with Cantata Dramatica, inspired by Scheherazade's tales.

Western fascination with The Arabian Nights has lasted centuries, though has rarely manifested itself in the form of opera. There have been a few settings of individual tales, such as Weber's Abu Hassan, Cherubini's Ali Baba, Peter Cornelius' Der Barbier von Bagdad and an opéra comique composed by Henri Rabaud in 1914, Mârouf, savetier du Caire. Maurice Ravel dabbled with the idea of an opera about the narrator of the tales herself, but discarded the project, though only after composing his enchanting Shéhérazade, ouverture de féerie intended as its curtain-raiser. Danyal Dhondy's new chamber opera Shahrazad focuses on the brave young heroine who spins her stories each evening to keep her husband, King Shahryār, enthralled, thus staving off execution the next morning. His opera's three acts cover the 999th, 1000th and 1001st nights... and what happened when Shahrazad finished telling her final tale.

It's a neat idea for the plot to cover the final three nights, leading to the cliffhanger when the stories cease, but Dhondy is saddled with a weak libretto that aims at the archaic language of Richard Burton's classic translation (1885) but misses much of its poetry. The plot is a tad rickety too. Given 1001 stories to choose from, having the Caliph Haroun al-Rashid call for a song contest to constitute Act 1 makes for a slow start, although it gives the singers fine solo opportunities in what feels a little like Baghdad's Got Talent. Haroun then instructs his vizier Jafar to marry his sister, but then warns them against any hanky-panky while he's away... but nonetheless they succumb. The following night (Act 2) Shahrazad interrupts her tale with a lighter one – The Romance of Prince Jasmine and Princess Almond – before resuming the darker account of what happens when Haroun returns to find his sister and Jafar have had a child together. She leaves the story on an uncertain note with Haroun calling for his kingdom to be cleansed and ordering Jafar's father to execute his own son. Despite leaving the tale hanging, Sharyar – in the most moving poetry of the evening – renounces his vow and begs Shahrazad to be his wife.

How far does a composer pursue orientalism – or a western idea of orientalism – in an Arabian Nights score? Is it possible to create a fusion of western and ethnic music? In a thoughtful programme note, Dhondy acknowledges the conundrum, deciding against exotic pastiche. There are certainly oriental influences in his always melodic score, performed by a six-piece ensemble: an oboe weaves sinuous arabesques in “The Song of the Falcon”; Shahrazad sings melismas up and down an harmonic scale as she warms up to tell her tales; a clarinet trills in “The Song of Lavender”. Yet there are surprises too. Where you might expect the tabla to introduce an authentically ethnic feel, it sometimes does the reverse; accompanied by pizzicato cello, it turns “The Song of Jasmine” into a jazz number. Dhondy's writing for voices is sympathetic and ensures most of the text carried across the small room. After the almost pastoral feel to Act 2 – a lovely cello recitative before Prince Jasmine plays his flute – Act 3 revealed Dhondy's score at its most dramatic, building tension well.

Nina Brazier's staging made good use of Leighton House's Studio, Sharyar often singing from the balcony, characters wending their way through the audience. Opera Vera's cast of seven, many playing multiple roles, cope well in a constricted space. Philippa Boyle's agile soprano tickled the ear as Shahrazad, with clear even vocal lines, while Aurore Lacabe was all flashing eyes and dusky mezzo as Zubeidah, the Caliph's favourite. Peter Brooke's firm bass-baritone and excellent diction made him an authoritative Haroun, while Martin Lamb was sonorous as the Dervish and other roles. Philip Hesketh directed the ensemble, tucked into an alcove, from the piano. An engaging evening.