Psychoville, BBC Two

Psychoville, whose first series was made on such a low budget that one episode was filmed in one room in one take (having the additional benefit of being an homage to Rope), used all the extra cash thrown at it to horrifying effect in its second series finale. A Jacobean plot, with a revivified cryogenically stored Nazi's head and a cremation while alive, was animated with the best technology licence fee payers' cash can give, and instead of being chucked up the wall, it gave TV's creepiest series a fine send-off.

If you haven't been following the series, try this for a precis: the inhabitants of a mental hospital eventually murdered a cruel nurse who was trying to discover a way to reanimate her Nazi father's frozen head; said inhabitants were picked off by an assassin paid by the cryogenic storage facility who was searching for a locket containing the reanimation secret.

Along the way, there were misinformed serial killings, intimations of incest, a clown with a hook instead of a hand and a permanent case of mistaken identity ("It's Mr Jelly, not Mr Jolly!"), an enraged dwarf with telepathic powers, the undead Tony Hancock, an apparently senile old lady called Mrs Ladybug Face who can speak Russian, Dawn French with a fake baby and a paraplegic whom she failed to feed, and - most disturbing of all - Christopher Biggins. And how can one forget the camp toyshop owner and neo-fascist who shot Tony Hancock's young black assistant or the Little Britain-esque woman who chained her gay best friend's husband to the bed?

Reece Shearsmith and Steve Pemberton, creators of Psychoville and players of most of its grotesque parts, have surpassed the standard for the outlandish they set with The League of Gentlemen. However, much of the good (bad?) will established by the tightly plotted first series, which always teetered on the brink of comedy and horror, was wasted with the first four episodes of this series, which contained few laughs and fewer scares (apart from Dawn French being stabbed in the neck with a pencil). Weak new characters were introduced and the plot seemed thin.

The culmination of this series thankfully redeemed the earlier virtues. As the plot became more and more absurd, it allowed the horror to blossom, and moments like the toyshop owner emerging in Nazi dress, the cremation of the assassin while he was still alive or the Nazi's head beginning to speak again were terrifying. Equally, the humour of the ditzy actress who had the locket (keep up) and the darker humour of David Sowerbutts (Steve Pemberton) dancing with his mother's corpse became more pronounced.

Psychoville should not be taken solely for a horrific, humorous curiosity; its creators have engaged with plenty of genres and media, placing it in a tradition and twisting that tradition at the same time. Hitchcock was obviously big, with the earlier Rope episode and a failed Strangers on a Train double assassination. Shearsmith and Pemberton were shining Hitchcock through the prism of 21st-century perversion, as the master would surely have approved. The absurdity of Tony Hancock was made unutterably grave when the character had to face the abandonment of his son. Cheesy prime-time interview shows were skewered and pop culture misappropriated.

The creators filtered all of these sources through their deranged imaginations both as tribute and as question: what would happen if you added humour to horror, or horror to humour?

I find it difficult to imagine Psychoville will return - almost all the main characters have been killed, and the plot has been satisfactorily, if insanely, tied up. Perhaps that is a failure of bravery, not leaving some mystery to puzzle over. Of course, there was the dead mother in the bathtub of ice cubes...

• Watch Psychoville on BBC iPlayer
• Find Psychoville - Series 2 on Amazon