In 2015, the Australian Ballet began its Storytime Ballet series with Sleeping Beauty, a mainstage production aimed at children aged from three to nine. Now, it's touring another Tchaikovsky ballet, also adapted especially for young children in an abridged version with a narrator – The Nutcracker. It will be coming to the Canberra Theatre in January.

But while it may be shorter in deference to the attention spans of the target audience, and have a smaller cast than a full scale ballet, it's not intended to be in any way cut-rate. This new production has been choreographed by the company's artistic director, David McAllister and features new costumes and sets designed by Krystal Giddings.

McAllister says the production condenses the story into about an hour. It is narrated by one of the characters, the toymaker and magician Dr Drosselmeyer, who gives young Clara the Nutcracker doll that comes to life. They go to a magical world of animated toys, dancing sweets, and other wonders.

He says families have come to Storytime Ballet with children as young as two and three up to early school age, eight and nine-year-olds with their parents and grandparents who can enjoy the high quality dancing by the performers, a few of them principal dancers, most of them drawn from the ensemble of the Australian Ballet.

"It's a good way of introducing young people to ballet and theatre," he says.

McAllister says there's "not that much difference" in choreographing a ballet for children as distinct from an adult audience: it's still about telling a story and making sense of it through dance.

"You do have to make sure the story is clear and attractive," he says. It's important, too, to make sure the audience's attention is directed to the most important elements on stage so they can follow the story. Having a character on stage as narrator helps, but there still has to be plenty of well co-ordinated movement around him.

"You can't expect him to do all the work – it has to make sense, it has to be a joint effort."

Giddings, whose design work covers plays and musicals, including Kinky Boots, says her sets and costumes here are trying out ideas for a full-scale Nutcracker in 2018. She collaborated with McAllister in devising the look of the production.

"We went through quite a few different ideas," Giddings says. What they ended up with was an Edwardian setting, "circa 1913 ... not too specific, nothing too bizarre with the Land of Sweets".

Although the Russian Saint Basil's Cathedral is evoked and she says there's an English feeling overall, they didn't want to make it too specifically oriented to any particular place or places in the settings or the costumes. And there are some distinctive touches.

The Sugar Plum Fairy is purple ("She's often pink") and Clara is not in a nightgown but a flowing pink diaphanous nightdress. The Mirlitons are designed to represent marzipan cupcakes and the villainous Mouse King, Giddings says, has a Dickensian look about him: "a touch of Fagin".

While the production encompasses both acts, this Nutcracker omits quite a bit of the music, including repeats, and some of the longer, slower character dances in act two such as the Pas de Deux, Waltz of the Flowers and the Arabian Dance, instead focusing on the more energetic numbers.

As for what will follow The Nutcracker in the Storytime Ballet series, that has yet to be decided.

"We haven't worked out the next one," McAllister says. Swan Lake, the other Tchaikovsky ballet, is "more adult", he says; Delibes' Coppelia and Adam's Giselle might be more suitable for children. Another possibility that interests him would be to create new works based on children's literature. But for now, the focus is on touring Tchaikovsky's Christmas-themed ballet and bringing the delights of dance to what they hope will be a new generation of enthusiasts.