"You must recognise them," quips pianist Belinda O'Hooley of the two Unthank sisters, Rachel and Becky. "They were in Lord of the Rings. As hobbits." Vaudevillian camp and the kind of misery conjured by traditional folk songs aren't obvious bedfellows, but there's little that's obvious about this group. The sisters from Tyneside, their droll accompanist - who really deserves her own show - and a violinist form an all-female quartet who are taking traditional folk music into unexpected territory.

Folk revivalists fall roughly into two camps: those pottering into the middle of the road, and those wheezing with worthy austerity. In the hands of the Winterset, however, traditional songs such as I Wish, I Wish, a heartrending lament for lost innocence, and the rambunctious Blue Bleezing Blind Drunk contrast the sisters' flinty Geordie accents with highly detailed piano arrangements full of chord changes that evoke Gershwin, Kurt Weill and - the nearest they get to the British folk tradition - Vaughan Williams. With the particular intuition of siblings, the Unthanks harmonise exquisitely, frequently picking out the least obvious harmonies and counter-melodies. The brief four-part acapella Ma Bonny Lad adds extra vocals from O'Hooley and violinist Niopha Keegan, another musician deftly avoiding cliche.

They tackle Robert Wyatt's Sea Song with Becky on breathy lead. It is utterly gorgeous, a brave move given the jazz-like complexity of Wyatt's songs, but one that makes absolute sense. Wyatt is not by any normal definition a folk musician, of course; his music creates its own genre. It's a thrill to see young musicians with the will and ability to form something equally singular.

· At Cambridge Folk festival (01223 357851) on Saturday and Sunday, then touring.