TIME will tell whether fairy stories such as The Dragon Brothersand Mr Midnight's Tree Bird will find a place in popular children's culture to match those of Andersen and Brothers Grimm. That is the aim of The Cloth of Dreams edited by Sally Grindley, with warm illustrations by James Mayhew (Little, Brown, $220). The 10 stories contain the necessary mixture of magic and fable that have made traditional fairy tales last through the generations. But most of the contributors have not attempted to update the genre by setting their stories in modern times. Instead, they choose back-drops ranging from the days of medieval kings and queens to those when smoggy city streets were packed with old Austins and other cars. One exception is Mary Hoffman's Leonie and the Last Wolf, an enchanting modern version of Little Red Riding Hood in which the last wolf in England protects the child on her journey through the urban jungle to visit her grandmother. One Little Teddy Bear, by Mark Burgess, (Picture Lions $59), is an excellent lift-the-flap counting book. Children will delight in finding an extra bear hiding on each page. Illustrations are bright and full of simple details, colours to spot and things to count. A tiger runs amok in Joseph's living room in Topsy Turvy Tiger, by Mary Todd (Little, Brown $135). Mum thinks Joseph is only kidding as he relates the mischievous antics of the tiger. The story is only let down by unnecessarily complicated prose that would be hard for a pre-school child to follow if it were not for Lynne Byrnes' lively pictures. Duncan, the little red tractor of Gosling Farm, is back in The Day Veronica Was Nosy and The Day The Ducks Went Skating (Picture Lions, $35 each). Colin Reeder's character and watercolour illustrations and Elizabeth Laird's text capture the seasonal rhythms of English farm life. Meanwhile, there is a new edition of Harvey's Hideout, by Russell Hoban and pictures by Lillian Hoban (Red Fox, $70), a warm story that brothers and sisters will readily identify with. Vole siblings Harvey and Mildred discover their boys' secret clubs and girls' parties to be nothing but wishful dreams. But they find consolation in breaking their rivalry and making a joint pretend world in Harvey's den. There is plenty of adventure in Duncan's Tree House, by Amanda Vesey (Picture Lions, $52). Young Duncan's courage is tested when he spends a spooky night in his new house. Duncan and the Bird is the compelling sequel, in which Duncan finds an enormous eggin his tree-top hideaway. But the giant bird that hatches has no stomach for normal bird fodder, such as worms and caterpillars. Instead, it has an insatiable appetite for cakes, leading to mayhem as it swoops down on a posh tea party. - Katherine Forestier