I think your best place to start is with your original stated aims and objectives. The early part of your PhD should about getting to grips with existing knowledge in your area, idnetifying the strengths and weaknesses, being able to provide a critique and, most crucially, spotting the gaps in knowledge. So, as you say, start with the literature and work out from there. At first you'll think everything is relevant, it's only later when you are able to be more specific on which parts of the literature are directly relevant. I find reading very inspirational for generating ideas.
However, all this said, an early meeting with your supervisor(s) is very important so you don't go off course. They'll probably offer guidance on what papers you should be reading. You have the opportunity to show that you've done some reading already to show your keen and can work independently. So I'd ask for a meeting early in the semester to get things off and running.