We present an analysis of a Čerenkov free-electron laser (FEL) driven by a flat electron beam. In this system, an electron beam traveling close to a dielectric slab placed at the top of an ideal conductor interacts with the copropagating electromagnetic surface mode. The surface mode arises due to singularity in the reflectivity of the dielectric slab for the incident evanescent wave. Under suitable conditions, the surface mode grows as a result of interaction with the electron beam. We show that the interaction of the surface mode with the copropagating electron beam can be rigorously understood by analyzing the singularity in the reflectivity. Using this approach, we set up coupled Maxwell-Lorentz equations for the system, in analogy with conventional undulator based FELs. We solve these equations analytically in the small signal regime to obtain formulas for the small signal gain, and the spatial growth rate. Saturation behavior of the system is analyzed by solving these equations numerically in the nonlinear regime. Results of numerical simulations are in good agreement with the analytical calculations in the linear regime. We find that Čerenkov FEL under appropriate conditions can produce copious coherent terahertz (THz) radiation.