Box office flops may force Channel 4 to close 'Trainspotting' studio

The Channel 4 board meets today to decide if it will close Britain's best-known film production studio, the loss-making FilmFour.

After a series of high-profile flops from the company that helped to instil fresh confidence in British film making, executives could agree to turn their backs on the big screen in favour of more made-for- television films.

To stave off closure, the company has searched for international partners to bolster the distribution side of its operations, which is seen as the main reason for its failure.

The 14 films put out in 2001 accounted for only 0.7 per cent of box office share while the main multinationals cornered two thirds of the market.

Last year's figures highlighted the decline from the days of its low-budget success stories, such as the cult movie Trainspotting, with no top 20 film for the year since 1999, when East is East came in 18th, grossing £7.2m in Britain.

FilmFour Ltd, which lost £5m last year, has been in involved in "ongoing discussions" with a number of other groups to try to challenge some of the studios that dominate the market, such as Columbia, Twentieth Century Fox and United International Pictures.

Channel 4 said yesterday that it could not say until the end of today's meeting if it had found a partner to help with distribution and finance.

Other options include drastically cutting back its £30m annual investment budget or closing the side of the business making feature films.

The meeting comes after a grim week for the broadcaster, in which its joint bid with ITV for the vacant digital terrestrial television service was defeated by a BBC-led consortium that included BSkyB.

A Channel 4 spokesman said yesterday: "The main Channel 4 board meeting will make a decision on the next direction for FilmFour Ltd."

The board was looking at "further strengthening links between Channel 4 and FilmFour Ltd, including refocusing FilmFour to produce films directly for the main channel".

Some senior industry figures said a return to its former guise as Channel 4's in-house production arm making films mainly for television would be a blow to the domestic industry. Harvey Weinstein, head of Miramax, said: "If anybody pulls the plug on FilmFour, especially right now, they would be making a huge mistake."

FilmFour made its reputation with films such as Trainspotting in 1996, which made £23m at the box office but cost only £2.4m to make and launched the career of Ewan McGregor. It was also involved in The Full Monty, which had a similar budget and made nearly £16m. However, since East is East, with FilmFour focusing on fewer, more expensive films, it has seen a series of flops with Lucky Break and Charlotte Gray, starring Cate Blanchett, failing to make a big impact last year.

FilmFour Ltd, the film making division, is distinct from the FilmFour subscription movie channel, for which executives have high hopes.