Art review: How Banksy and the art of the mean streets found their way to a watermill in Aberfeldy

THESE are strange times for graffiti artists. Not so very long ago, the simple act of cracking open a can of spray paint in an underpass or back alley made you an outsider, both in the eyes of the art world and in the eyes of society at large.

But now, confusingly, this no longer seems to be the case. The seismic shift in attitudes that has taken place over the last few years was neatly encapsulated by a live painting event in Edinburgh earlier this month.

As part of his ongoing exhibition at the Henderson Gallery, Elph, one of Scotland's leading spraycan-slingers, created a huge, colourful mural in Thistle Street Lane while about 30 or 40 well-heeled New-Towners milled around nearby.

Frankly, if Elph or anyone else had tried to paint a wall in this part of the city ten or even five years ago, the locals would have called the police, but now here they all were, lapping up the artist's every flourish while sipping fine wine and nibbling on canapés. Anyone for veggie haggis? It goes beautifully with the rosé.

Of course, we have celebrity street artist Banksy to thank for this abrupt rearranging of the cultural landscape. In 2007, when his controversial anti-war painting, Bombing Middle England, sold for a stonking £102,000 (at Sotheby's, natch) many purists feared that a previously edgy art form had become sanitised and safe.

Later the same year, as if to confirm these suspicions, the Evening Standard reported that Islington Council had started to employ people to restore Banksy originals on walls in the area after they had been damaged by other graffiti artists painting over them. For years, councils all over London had devoted considerable amounts of time and money to eradicating all trace of Banksy's work, but now they seemed to be doing their utmost to protect it. When challenged about whether this was a worthwhile way of spending taxpayers' money, a spokesman for Islington Council explained that they were simply responding to residents' demands.

Another good indicator of how far graffiti has come in the last decade – geographically as well as metaphorically – is a new exhibition at the Watermill Gallery in Aberfeldy. The small market town in Highland Perthshire isn't exactly famous for its street art.

In fact, as far as Watermill owners Kevin and Jayne Ramage are aware, the only place in town with any graffiti is the skatepark. Nevertheless, they've already had a positive response to their show, the first of its kind in the Highlands.

"We realised that the way to sell this exhibition was not to send out the usual thousands of brochures through the post," says Kevin, "so we've been letting people know about it by e-mail, getting the enthusiasts to pass on the news through electronic formats."

"We also had a stand at this year's Glasgow Art Fair," says Jayne. "We were handing out draft copies of the brochure and that generated a lot of interest. A couple of guys came up and started talking to us and it turned out they had fantastic collections of street art themselves. These were young guys working offshore – obviously they had really well paid jobs and realised that these pictures were worth having."

"We've had a lot of enquiries from older people too," adds Kevin, "including one from a client who's the wiser side of 60."

The Watermill show is called Fourth Element, in recognition of street art's place within hip-hop culture, after rapping, DJing and breakdancing.

In addition to iconic works by Banksy and his French precursor, Blek Le Rat, it also includes a clever spin on the Mona Lisa by Dolk, which has the mysterious lady painting over her own image with red paint, and a clever bit of superhero subversion by D*Face, in which Spider-Man is revealed as a closet fly poster. There's something for everyone too: prices range from £150 for unframed prints to £12,000 for works on canvas.

All well and good, but isn't there something inherently contradictory about putting street art in a gallery? The Ramages think not.

"At the end of the day, artists have to live," says Jayne. "For every Banksy there are ten other artists struggling away in their garrets, so we shouldn't deny them to make a living."

"Also," says Kevin, "when artists sell prints in an edition and make a modest sum out of that, that actually gives them the wherewithal to carry on their more creative work, which often doesn't earn them a penny. In fact, often the most creative work is the least commercial."

The Ramages freely admit that they are newcomers to the street art market, but as members of various protest movements in the 1970s and 80s, they've found it easy to tune in to its rebellious spirit.

"CND ... Poll Tax ... the Miner's Strike ... we're both seasoned protesters," says Jayne.

"Yeah, we've got history," says Kevin.

The couple even considered hitting the people of Aberfeldy with a guerrilla ad campaign for this exhibition, but in the end they decided to generate publicity through more conventional channels.

"I was tempted to fly post," says Jayne, "but it would have been a bit too easy to attribute."

• The Fourth Element is at the Watermill Gallery, Aberfeldy, until 6 July. To tie in with the exhibition, there will be a graffiti workshop by Elph on 6 July. For details, tel: [phone] or e-mail [e-mail]

• Elph versus Burns is at the Henderson Gallery, Edinburgh, until 6 June, www.thehendersongallery.com