Brits in the thick of it at Sundance

A satirical political comedy by Armando Iannucci has taken Robert Redford's indie film festival by storm. Gaynor Flynn reports

When the Sundance Film Festival kicked off in Park City, Utah, last week, Robert Redford, who started the event in 1984, wasn't all that interested in talking about "it being the 25th year of our existence as a festival". He said, "I'm more interested in looking forward." It was a sentiment uppermost in people's minds as they watched President Obama's inauguration on Tuesday.

"We're looking at a world that's very screwed up," said Redford. "But with that comes opportunities. I'm a firm believer in the strength of art. When the economy gets tough, art will survive. [But] I'm glad the gang that couldn't shoot straight is going."

Depicting screwed-up worlds is the speciality of Armando Iannucci, better known to British audiences as the comic writer behind the hit television shows The Thick of It and I'm Alan Partridge. And his film proved the surprise hit of the festival, when it screened earlier this week.

Set inside the corridors of power, In the Loop is a smart, sharply observed political satire about how the war on Iraq was essentially "sold to the world". Tom Hollander stars as the gaffe-prone British minister Simon Foster who is shipped off to Washington DC when he accidentally announces to the press that a war in the Middle East is "unforeseeable".

At first Foster is a bit miffed at the turn of events, but quickly realises that a) America is far more exciting than London and b) this could be his chance to become a VIP in world affairs. Peter Capaldi reprises his TV role as the PM's bullish director of communications Malcolm Tucker, who is eagerly pushing for war. The film also stars James Gandolfini (The Sopranos) and Steve Coogan.

In the Loop would be terrifying if it weren't so funny. Iannucci says the depiction of bureaucrats as bungling ninnies with oversized egos is not that far fetched. In fact, it's quite the reverse. "It's a pretty accurate depiction of politics today and it is frightening," he laughs. "Twenty-three-year-old spin doctors are really running the world."

The film, which marks Iannucci's big-screen directorial debut, premiered to rave reviews this week.

"I am surprised," says Iannucci. "I came out here not knowing what the reaction would be. I didn't know whether American audiences would get it. Whether they would buy into all the minutiae of British politics. You just never know. I mean, look at the Chief Justice this week. On one of the biggest days of his life, he screws up the oath of office. He was obviously very nervous. So you never know how things are going to go."

Critics at Sundance are already predicting that In the Loop will be the best British film of the year.

"Yes but it's only January," deadpans Iannucci. "But I'm glad they like it. I suppose because we spent a lot of time – although it's set in a political world – not making it political. It's more about office politics and personalities rather than the big picture."

Sundance has always been important for American independent film-makers but it's become just as important for the British. Ever since a low-budget English film with a funny name (Four Weddings and a Funeral, 1994) drove Sundance audiences crazy and sparked a renaissance in British cinema, UK film-makers have flocked to Park City every January.

Himesh Kar, senior executive of the UK Film Council's New Cinema Fund agrees. "I think for indie film-makers it's one of the crucial film festivals and historically it can be huge for UK film-makers. It can really launch careers and launch films. I guess the best example is Man on Wire, which debuted at Sundance last year and now, of course, has got its Oscar nomination."

The council has 12 features in the festival this year and several of them have already generated a buzz. Director Lone Scherfig's An Education, a 1960s-set tale about a bright 16-year-old (Carey Mulligan) who is swept off her feet by a much older man (Peter Sarsgaard), has received glowing reviews. Written by Nick Hornby, the film also stars Emma Thompson and Alfred Molina, but it's the 23-year-old Mulligan who is being hailed as the breakout star of the festival.

Duncan Jones, David Bowie's son, also received positive reviews this week for his debut feature film Moon, an atmospheric sci-fi drama about the adversity faced by an astronaut (Sam Rockwell) about to return to Earth after three years on the moon.

Speculation is rife that Pete Travis's Endgame will be another of the Brit pack to make a quick sale during Sundance. The apartheid thriller stars William Hurt and Chiwetel Ejiofor. "It's extraordinary for me to be here," says Travis, who was a social worker in King's Cross before he "accidentally" discovered film-making. "To have a film like this, which is particularly relevant here, especially at this time in American history with a new president and all the hope that goes with that, it just makes it really special."