First the actors, then the set... now the world's unluckiest film loses its backers

In the annals of silver-screen catastrophes there can be few productions unluckier than Terry Gilliam's endeavours to make a film about Don Quixote.

The British director's previous attempts at shooting a modern take on Miguel Cervantes' hapless Spanish hero have been so beset by on-set disasters that he was forced to abandon the project altogether – leaving Johnny Depp hanging – and instead make a documentary about what he dubbed "the film that didn't want to be made".

After a decade of mishaps, in which sets were washed away by flash floods, a leading man was rushed to hospital, and the engines of swooping fighter jets ruined sound recordings, it finally looked as if Gilliam would realise his dream, having signed up Robert Duval to play the chivalry-obsessed Quixote.

After years of bitter legal wrangling and arguments with insurers following the first failed attempt to get The Man Who Killed Don Quixote off the ground, Gilliam announced earlier this year that he was finally going to start shooting a new version of the film this month. But now this latest attempt has unravelled on the eve of filming after Gilliam's financial backers pulled out.

"The financing collapsed about a month and a half ago," Gilliam told Variety. "I shouldn't be here. The plan was to be shooting Quixote right now."

The 69-year-old director is now desperately searching for new support to resurrect the fortunes of a film that is fast becoming the silver-screen equivalent of Macbeth – a production surrounded by superstitious rumours of curses and bad luck.

In true Gilliam style, the film was supposed to bend the edges of both reality and Cervantes' novel by telling the story of a 21st-century advertising executive who inadvertently travels back in time to 17th-century Spain, where he meets Don Quixote.

Alongside Duval as the lead, Ewan McGregor was set to play the advertising executive, a role that was briefly taken up by Johnny Depp the last time Gilliam tried to make the film.

The pressure to find new backers will be made all the more problematic by the announcement earlier this summer that Warner Brothers and Joel Silver are going to fast-track their own Don Quixote production.

Unlike Gilliam, who has had little luck persuading big studios to invest in his Quixote project, Silver's version has been snapped up by Warner Brothers, who are reportedly in favour of a Pirates of the Caribbean-esque swashbuckling version of Don Quixote, as opposed to Gilliam's more nuanced interpretation.

Gilliam declined to talk to The Independent, but in Lost in La Mancha, the 2002 documentary that was pulled from the ashes of the first aborted attempt to make a Quixote film, Gilliam's co-scriptwriter Tony Grisoni explained why his friend was obsessed with Cervantes' delusional Spanish hero.

"Don Quixote seems to have been at the back of Terry's work for a long time," he explained. "In the broadest sense he is a hero that appeals to Terry because the notion of someone gleefully battling in the face of all odds, logic and reality is one that appeals to him."

Few directors have battled with such persistence against the kind of odds put in the way of Gilliam's Quixote film.

After writing a script with Grisoni and struggling to find financial backing, Gilliam's team finally began shooting on a barren hillside in northern Spain in October 2000. The cameras had barely started to roll before a series of disasters struck.

Nonetheless Gilliam is determined to press on, and scoffs at the suggestion that the project is cursed.

"Don Quixote gives me something to look forward to, always," he said. "Maybe the most frightening thing is to actually make the film."

Jinxed film: the curse of Don Quixote?

Star falls ill

French actor Jean Rochefort spent a year learning English to play Quixote. He was flown back to France for emergency medical treatment after suffering back problems. Disaster rating: 4/5

Military intervention

The set was next to a military base with jets regularly flying overhead, ruining the sound. Disaster rating: 2/5

Floods wreck set

Flash floods swept through the crew's camp on day two, destroying vital equipment and changing the colour of the surrounding hills. Disaster rating: 3/5

Filming abandoned

Gilliam is forced to scrap the whole project and its stars, including Johnny Depp have to fill their work schedules elsewhere Disaster rating: 5/5