In a cinematic first for Bruce Springsteen, the rock star’s all-American songbook is to provide the soundtrack to a new British musical about growing up in Luton during the 1980s.

A unique arrangement between the New Jersey-raised musician, known to fans as “the Boss”, and the director Gurinder Chadha, creator of the 2002 box-office hit Bend It Like Beckham, will see a selection of the singer’s early tracks playing a key part in her new comedy, Blinded by the Light.

Billed as “a hybrid musical”, the film will use Springsteen’s music to help tell the story of a young Muslim boy coping with adolescence and racism, as well as parental disapproval.

The film is based on Sarfraz Manzoor’s 2007 memoir, Greetings from Bury Park, and it is due to finish filming at Ealing Studios in west London later this month. But an early trailer will be screened later this week for an international audience at the Cannes film festival.

Manzoor’s book chronicled the inspirational impact of Springsteen’s lyrics on him as a youth growing up in Luton. Chadha, also a long-time admirer of the music, was keen to bring the story to the big screen as soon as she read it.

“I told Sarfraz then I knew how to make it into a film,” she told the Observer, adding she still found it hard to believe Springsteen had backed the project. “Sarfraz and I were at the London premiere of Bruce’s film The Promise in 2010 when we actually bumped into him on the red carpet. He said he had read his book and that he thought it was amazing and, while Sarfraz was still fainting with joy, I quickly told him about the film we wanted to make.

“Bruce said: ‘Sounds good,’ and told us to talk to his manager, Jon Landau. Then we had to start developing a script we felt was good enough. Without the blessing of Bruce, Jon, and his other manager, Barbara Carr, there’d be no music and so no film.”

Chadha, whose last film The Viceroy’s House tackled the tragic causes and epic scale of the partition of India, said she hopes Blinded by the Light will, by contrast, mix a little of the quirky British humour of some of her earlier films, such as Bhaji on the Beach (1993) and Angus, Thongs and Perfect Snogging (2008) with the lively energy of 1980s high-school movies written by John Hughes such as Pretty in Pink and The Breakfast Club.

Sally Phillips, Rob Brydon and Hayley Attwell will each appear in cameo roles in the new musical alongside its central cast, and Brydon, another Springsteen fan, gets to perform the song Thunder Road.

“It is not a jazz-hands musical, though,” said Chadha, 58. “We are certainly not using the greatest hits – so it is also not a jukebox outing. And it is not Bollywood either. It is a film about the way that, when you love the words and the lyrics of a great song, they work their way into your life.”

Blinded by the Light will feature original Springsteen recordings in the score, as well as new versions sung by members of the cast. “We knew the film had to be something that Bruce would like and it just made us very conscientious and responsible about the handling of the tracks. He was in his 20s when he wrote most of the songs we use. There’s a lot about his feelings about his father and his home town, and we relate that to Luton.

“But when we came to the point of pressing ‘send’ on the screenplay, we were all thinking, is this the very best we can do for Bruce?”

On set in Ealing last week, as Chadha planned the camera angles for a family dinner table scene with her frequent collaborator, the cinematographer Ben Smithard, she also gamely chopped vegetables for the dishes that would appear on the table. “It must not look too fancy for a busy mum to have made. Is there any ginger? I want them to be able to eat it,” Chadha said.

Great care is being taken to be authentic because the film, which stars Kulvinder Ghir as the father and the newcomer Viveik Kalra, is intended as a tribute not only to Manzoor’s family but also to Springsteen’s childhood and Chadha’s own memories of growing up in London close to the historic film studios.

“I have had to bear in mind my feelings for all of our families in the way we do this,” she said. “When you look back you tend to see different things and understand your parents differently and that is what this film is about.” The screenplay was written by Manzoor, Chadha and the American screenwriter Paul Mayeda Berges.

“Sarfraz had done a great job with all the detail. But in fact his life has changed a lot in the time we worked on the book. He has two children now and feels differently about his family and his father. He is less angry and we have reflected that. I definitely relied on Sarfraz on all the Bruce questions. He knows exactly which lyric says what.”

Manzoor, 46, is the son of working-class immigrants in a world he remembers felt small. He credits Springsteen with opening up that world and said this weekend he has found watching filming “utterly surreal”.

“There have been moments on set when I could not stop smiling at the sight of a feature film crew in the middle of Luton, and there have been other moments when I have been in floods of tears watching Viveik and Kulvinder playing a version of me and my dad,” he said. “Springsteen changed my life when I was 16, and 30 years on, by giving his blessing to this film, he has changed my life again. and I am grateful beyond words.”

• This article was amended on 7 May 2018 to clarify the collaboration on the screenplay.