Meet Psychic Sally, Lady Diana's favourite mystic

The most controversial woman in Britain is perkily clip-clipping across the stage quickly in high heels, M&S trousers and a midnight-blue spangly top, urgently sharing her vision with the audience.

"Look!" she cries, pushing back her beautifully styled blonde mane. "I've changed my hairdo so you can see I haven't got earphones on; what I'm wearing is a head mic so you can hear me. I'm not preying on people, I'm not deceiving anyone," she says, with the hint of a tremor in her voice.

"I'm just being me, and although I might seem mental, I feel very privileged to have this gift, even though I don't understand it. Mad as it sounds, it brings comfort. I'm proud to be a medium."

A cry goes up from the stalls, "We love you, Sally!", and Sally Morgan glows with affirmation. Morgan, a 59-year-old mother of three, was the psychic to Diana, Princess of Wales (and yes, we've all heard the "shouldn't she have warned her to wear a seat belt?" quip). George Michael, Uma Thurman and Katie Price have also consulted her. She is also the author of Life After Death, a DVD star - of Psychic Sally on the Road and Psychic Sally's Big Fat Operation, documenting how she lost 14 stone after surgery - runs a Tarot hotline and is a satellite television regular.

Her fans are legion and her shows a sell-out. But the colourful clairvoyant, who claims to see dead people, has just endured the 21st-century equivalent of a ducking stool in the village pond. Hers was a thoroughly modern witch hunt by the media in which she was accused of charlatanism and cynical manipulation of the vulnerable and the bereaved.

An audience member sitting in the back row of a Dublin theatre earlier this month claimed that she overheard a man relaying information to Morgan. An internal window to an adjoining room had been left ajar and, inside, an employee was allegedly disclosing details of people's lives, which were then repeated by the clairvoyant moments later.

The woman went on to telephone the Irish national radio station, RTE, to complain. From every quarter, scorn poured on Morgan.

Unbowed and unapologetic, she has clearly survived her immersion in vitriol. But that outcome, as every Witchfinder General knows, is merely proof that she is guilty. But of what, exactly?

Tonight, in Dartford, she addresses the subject of her press mauling, telling the packed auditorium that it has been the most horrible week imaginable but that she will not be cowed by the negativity. "I don't hear anything through my ears. It's like trying to say I receive messages through the soles of my feet!" She puts her hands on her hips in a gesture of exasperation and a cheer goes up.

No longer the homely figure of old, Morgan looks chic and shapely, her hair coiffed into a sophisticated bob. With her fashionable glasses and pretty features, she's channelling Sarah Palin, another formidable lady with the common touch who finds herself fighting to regain her reputation.

The audience tonight is overwhelmingly female: older, dressed to the nines and, at the risk of sounding politically incorrect, sporting a great many more tattoos than you would see at a theatre production of Uncle Vanya.

But there's every reason to get dolled up: at pounds 24 a ticket for the gods, an evening with Sally is a proper night out. Two hours of communion with the spirit world, with a 15 minute break for a cuppa, is a major event that leaves Morgan looking fresh as a daisy and the rest of us wilted.

With extravagant concentration she tunes into names and sounds and feelings in the celestial hubbub around her, calling out things like "Les wants to talk about his passing" or "This is a young man who took his own life… I can hear Paul, yes it's Paul", until someone raises a hand and claims them.

On paper this all sounds entirely corny but it's one of those you-had-to-be-there experiences for, make no mistake, Morgan is a charismatic performer.

She gesticulates, squeals and emotes: one moment she's gasping with throat cancer, the next, trilling away in the high-pitched voice of a little girl who, disturbingly, turns out to be someone's stillborn twin daughter.

The woman who has stood up is weeping at the memory of the baby she lost. The spirit child is the same age as her existing daughter. Morgan correctly names the mother and surviving twin.

She communicates with deceased husbands and mothers lost to cancer. One lady, who stands up to receive the cryptic message "Are you proud of your son?", is, judging by her accent, educated and middle class. Morgan correctly describes her job (school secretary) and her husband's name (Brian) and alludes to flooding, which clearly strikes a chord, as the poor woman starts to cry and is comforted by her daughter.

There are no takers for Ian, who died in a plane crash, so Morgan moves on. When she fails to hit the mark, with a name or a detail, she attributes it to another spirit coming through and with effortless fluency turns her attention elsewhere.

She confides that those who have "passed" (the departed never "die") are forming an invisible queue to send their love back from Heaven - and they are always, quite specifically, in Heaven.

Her utterances range from the sort of vague observations anyone could flag up - a great number of the audience are older women, who will certainly have lost parents, and indeed husbands - to the weirdly specific.

She asks one woman if she recently took off her wedding ring and threw it on to some grass, joking: "Don't worry sweetheart, we've all done it!" The woman gasps and says that her husband did just that last Friday. Morgan asks if she'd like to know where it fell, because it landed near an upright stake in the garden. The woman nods and says that's where it was found.

So how is Morgan pulling this off? There are almost as many misses as hits, because, as she admits herself: "I used to try really hard to make things fit and please people, but I have enough confidence now just to tell it like it is."

By and large the audience remains tight-lipped, far from the guileless stooges one might imagine. It is rare for anyone to volunteer details that might help Morgan embellish her insights; instead they tend to agree or disagree monosyllabically.

Given the roar of noise in the foyer before the show, it's also difficult to imagine any "plants" mingling with the crowd to listen in on conversations. Passing on relevant snippets would be like Chinese whispers.

But, crucially, over by the merchandise desk, there are two large glass bowls and piles of little paper slips bearing the title "Sally's Love Letters". Audience members are encouraged to write a brief message or question, along with their name, in the hope that Sally might pick the card out from her Psychic Orb during the show.

It would be possible for someone to rifle through the bowls and collect information, albeit of the sketchiest sort: "Are you free from pain, Nana Jean?" or "Can you give me advice about Mick?". These cards would not be drawn, but the names could still be called out.

For my part, I wrote, "Jerry, why did you have to die? Was there anything we could have done to save you?", hoping either to expose Morgan as a fraud or to reveal her to be a truly, uniquely gifted oracle.

Jerry was our family pet; had Morgan slyly read the slip she would have assumed he was a person. Had she been a conduit for the spirit world she would have identified him as a guinea pig. In the event, Jerry doesn't get a mention.

Cathy, 52, has come along with "an open mind". She is not, she emphasises, naive. "Anyone who seriously wants to contact someone who has passed will go and have a one-to-one with Sally or someone else," she says. "Tonight is a show, with a bit of razzmatazz, and although you probably won't get picked, there's a hope that you might."

As the performance comes to a close, the applause isn't as wild as I would have expected and there are murmurs that Morgan isn't on top form. But the people she spoke to appear shocked and gratified in equal measure.

As for me, I found the performance ghoulishly entertaining, although I have no idea how she does it. My gut instinct is that you can no more go along and carp about a medium "misleading" people than you can about a magician's "deceitful legerdemain" or a congregation being "duped" by a priest in vestments.

As Freud once pointed out, just as no one can be forced into belief, so no one can be forced into unbelief. And, regardless of accusations of trickery, the fact remains that as long as there are believers, there will be psychics.