Although The Winter's Tale has never quite enjoyed the popularity of Shakespeare's most familiar plays, the idiosyncratic structure, mixture of comedy and tragedy and its famous 'exit pursued by a bear' stage direction does offer ambitious directors an opportunity to explore an unfamiliar side of the Bard. Max Webster's production introduces new geographical details – Bohemia becomes Fife, with Scots the language of the peasantry – and a dynamic live score inspired by Scottish folk music but fails to resolve the problems of a script that prizes formal experimentation, and poetic speeches, over theatrical coherence.

Webster's interpretation is at its most effective during the second act, when the action shifts to pastoral romance. Escaping from the script and encouraging Jimmy Chisholm to play a vaudeville-like character draws out the comedy, and while the peasants are stereotypically stupid, the scenes of country life are engaging and hilarious. The first act, with sparse design and a strong performance from John Michie as the jealous King Leontes, sets a doom-laden tone that is only occasionally undermined by ensemble scenes that topple into slapstick.

The dramatic shifts in mood, however, are badly managed by the script: beginning as a ham-fisted pastiche of Greek tragedy, it shifts to comedy through a lazy speech from a narrator begging the audience for a tolerance the play refuses to earn. The final transition – which resolves the comedy back into the tragedy and then to redemption is dealt with peremptorily: rather than play out the forgiveness, it is described in a brief discussion by minor characters.

And while Mitchie captures something of the austere majesty of a king driven first by jealous then guilt, Shakespeare's failure to ground the character's emotions in anything more than a sudden paranoia – the same author who so precisely delineated Othello's delusional jealousy – he ends up more like a guest on Jeremy Kyle than a tragic protagonist. This might suggest a naturalistic approach, but it jars against the script's tragic pretensions.

Webster's direction manages to disguise some of these weaknesses through Alasdair MacRae's compositions and witty stage-craft: Maureen Beattie's loyal Paulina, Andy Clarke's wronged brother and John Stahl's bemused rustic draw out the pathos of characters caught up in a monarchical temper tantrum. There are moments of striking visual power – the return to Leontes' kingdom evokes a nation caught in a perpetual winter – and episodes of fun and intensity. However, the lurches of the script between moods, the inconsistency of the plotting and the finale which suddenly suggests a magical resolution to Leontes' murderous temper leave The Winter's Tale unsatisfying despite the dynamism in the production and sporadic hilarity and emotive melodrama.

The Winter's Tale, Royal Lyceum Theatre, Edinburgh, until Sat 4 Mar.