Twentieth-century history has made the apparent anti-Semitism of Shakespeare’s portrayal of Shylock, the Jewish money-lender, problematic, but The Merchant of Venice is as much about the contrast between emotion and materialism, love and money, as about conflict between Christians and Jews. A young Venetian, Bassanio, falls in love with Portia of Belmont.She will only accept a man who chooses the one casket out of three - gold, silver and lead - that holds her portrait. To finance his trip to woo her, Bassanio borrows money from his friend Antonio, who in turn borrows from Shylock. When Antonio’s ships are lost at sea, Shylock demands repayment.

He is foiled only when Portia, disguised as a lawyer, successfully defends Antonio in court.

Director Gale Edwards says: “It’s a tricky play, in the same way that The Taming of the Shrew is tricky. But it’s also an exciting play to do in our current time, when we are in a world which creates the Other in the form of the Devil. So Jews or Muslims are demonised. Western society creates the Other, and then the Other rises up and demands his pound of flesh. Or blows up the Twin Towers.”

She argues that the play “isn’t just about someone who happens to be a Jew, but about the Jew as a symbol of an oppressed people. In the past, Christians prevented Jews from having any occupation except money-lending, and when they charged interest they were despised. So Shylock is caught in a double bind - the key to his character is the “ancient grudge” between the two groups. “Shylock,” she points out, “grew up in a culture of discrimination, oppression and cruelty.”

Part of Chichester’s season of Water Plays (others include The Gondoliers and The Water Babies), The Merchant of Venice is being staged “in an auditorium whose stage has been flooded, in very simple modern dress (but no mobile phones), where the set is a series of platforms and jetties, and looks breathtakingly beautiful”.

Edwards says that the play “is very thought-provoking” in terms of alienation and prejudice. It raises questions of loyalty and it asks: are you as good as your word? Bassanio is tested when he gives up Portia’s ring; Shylock tests Antonio by demanding his pound of flesh. “He stands by his word - with disastrous results.” Such moral questions are “increasingly relevant to today’s society”.

The Merchant of Venice runs in rep from June6 to October 2. Box office: 01243 781 312. A resource pack and schools workshops are also available and there is a masterclass on September 25. Tel: 01243 784 437A production is also part of the Ludlow Festival, June 20 to July 12 in rep