The twin centrepieces of this modestly sized but perfectly formed exhibition by India-raised, London-based artist Raqib Shaw are the works that respond directly to paintings which he first encountered on the walls of the Scottish National Gallery. One is Sir Joseph Noel Paton's 'The Quarrel of Oberon and Titania', a work from 1849 which elevates the garden of Shakespeare's A Midsummer Night's Dream to a fantastical portmanteau which captures the lucid dreaming sense of the play, and the other is Lucas Cranach the Elder's 1528 'An Allegory of Melancholy', in which a young woman – possibly a witch – mothers brawling infants and a dog, while storm clouds gather in the distance.

Shaw's own paintings accentuate the somnambulant, fantasy-based elements of these works in over-driven style, using the industrial enamel paints he has employed ever since he was a poor student at St Martin's School of Art. He and his team create his works in painstaking style, layering the paints to create a raised line which looks almost embossed in places; the effect appears 3D and hyperreal, and lends the works a sense of durability and sturdiness.

In each case, the originals have been interpreted with a touch of surreal grandeur which emulates both the gravity of Old Master works and the imaginative playfulness of late 20th century sci-fi and fantasy book illustration. Shaw himself is a key player in his paintings, albeit heavily disguised; in his response to Cranach the Elder, a blue-skinned version of himself takes the place of the witch, sitting before a representation of Dal Lake, Kashmir, and gazing at a crystal ball which shows the remains of his torched flat; in his unrecognisable response to Paton, he has become an ass-headed opium smoker surrounded by fairies and hallucinogens.

There are a number of other pieces by Shaw here, including the dazzling Bollywood opulence of 'The Purification of the Temple (after Marcello Venusti)'; 'Last Rites of the Artist's Ego at Shankaracharya Temple (after Ludovico Mazzolino)', in which Shaw reads the last rites to himself in a coffin, amid an icy winter landscape; and 'Kashmir Danae (after Jan Gossaert)', in which Shaw venerates himself amid the disputed Kashmir landscape of his childhood. How much we choose to read into the ego and motivations of their creator is up to the viewer, yet his reimagining of Old Master style with a 21st century eye is reason enough to dwell on his work.

Raqib Shaw: Reinventing the Old Masters is at the Scottish National Gallery of Modern Art One, Edinburgh, until Sun 28 Oct.