When Mary Whitehouse, at the height of the British "video nasty" scare, declared a "battle for the soul of the nation", she could hardly have imagined that the film titles under dispute for their violent content would, four decades later, be celebrated in one of the year's more highly acclaimed films. Ms Whitehouse and her team might well view the raves for Prano Bailey-Bond's Censor as evidence that the battle had been lost. Whither the Festival of Light?

Then again, those moralists had a habit of seeing only the flying innards and missing the underlying messages. Bailey-Bond's film is a great deal more equivocal about that era of horror than gore enthusiasts might expect. The fiercely committed Niamh Algar stars as Enid, a censor working at a fictional version of the British Board of Film Classification during the height of the scare. She and her colleagues sit in smoky rooms and decide which decapitation to decapitate and which evisceration to eviscerate.

Censor is sound on the breathless media manipulations of the era. The tabloids initially blame one particular horror for inspiring a murder, but later own up – shades of an infamous case from the early 1990s – that the accused may not even have seen the thing. The scare is a convenient distraction from the unemployment and inner-city decay that characterised those years.

And yet the campaigners against video nasties argued that the violence depicted could distort vulnerable minds – particularly those of children – and edge them towards mental instability. One reading of Censor has Enid going through just such a journey. Her mental susceptibility comes from memories of a sister who vanished in the sort of spooky woods that so often offers backdrops to 1980s horror (where else would the Evil Dead come alive again?).

Enid's viewing of Don't Go into the Church, a film with eerie echoes of that childhood trauma, sets her mind reeling and ultimately persuades her that the sister might still be out there. Investigations bring her up against a creepy producer made sleazily dangerous by the nationally treasured Michael Smiley. Eventually, she ends up in a gruesome, unreal environment not unlike those in the films she has spent her days trimming.

So violent horror does send you mad and should actually be banned? Censor is, of course, not arguing that. This would be a tricky case for a film that takes such inventive relish in the bloody annihilation of tertiary characters. Respect is shown to films that, initially reviled, now get reissued in well-appointed Blu-Ray editions. But Bailey-Bond is alive to the ways fictional horror can weave itself around real-life traumas. The early 1980s were, in many ways, a grim time and, as society coiled inwards against itself, the likes of The Driller Killer and Cannibal Holocaust made suitably deafening background noise.

Censor is not quite as lodged in its era and its governing genre as were Peter Strickland films such as Berberian Sound Studio or In Fabric. But the film-makers do a good job in summoning up the baggy-shouldered bust that preceded the first of Mrs Thatcher's booms. Everywhere is flattened by a despairing fug. Answering machines are novelties and people still smoke on the London Underground. The later stages have fun with the tropes of contemporaneous splatter while still trading in genuine unease. There are drab shades of VHS to the interiors and gaudy explosions of giallo elsewhere.

If one were to gripe, one might argue that the bloody denouement is too unfocused and the satirical coda too on-the-nose. But Algar’s intense performance – we may not believe, but there is no doubt that Enid does – keeps the momentum surging throughout. A clever concept carried out with great invention and some emotional honesty.

Released on August 20th