Hollywood writers close to agreeing deal before Oscars

The three-month old Hollywood writers' strike, which has pulled major US drama serials off the air and turned network television into a swamp of reality programming, may be on the verge of a solution.

Draft contracts were being passed between studio bosses and union lawyers over the weekend, said insiders, raising hopes of a deal within days and lifting the threat of disruption to the Oscars on 24 February.

Talks involving several of Hollywood's most powerful executives made a significant breakthrough last Friday, it was claimed, sketching the outlines of an agreement on how much writers will be paid for internet broadcasting of their work.

Although previous outbreaks of optimism have proved misguided, talks were given a new impetus when directors concluded similar contract negotiations in record time last month. Minds have also been concentrated by the looming Oscars ceremony, which writers and actors had threaten to shut down in the same way they boycotted the Golden Globes at the start of January.

The leadership of the Writers Guild of America has been under pressure both from its own members – including the likes of Tom Hanks and George Clooney who have offered to mediate to end the strike – and from Hollywood's army of lighting technicians, set-builders, caterers, make-up artists and the rest, all of whom have suffered from the dramatic fall-off in production since the writers walked out on 5 November. Stars from the Screen Actors Guild have stayed out in sympathy.

Bob Iger, the head of Disney, and Peter Chernin, Rupert Murdoch's right hand man at NewsCorp, which owns 20th Century Fox, were among the powerbrokers involved in negotiations on Friday and continuing into the weekend.

The main area of contention between the two sides has been royalties on programmes shown free on the internet, a way of broadcasting that is growing in importance and could be a big revenue source for the studios in the future. The studios say it is too early to know how the medium will develop and want to cap the sums handed over to writers; the guild says they should get a percentage. The outlines of a compromise were not clear last night, and all sides said they would observe the news blackout imposed on the talks.

That will come as a relief to American television viewers, now that all but a handful of major shows have exhausted their backlog of finished episodes. Networks have fallen back on repeats and reality TV programmes, even resurrecting American Gladiators to fill prime time slots. The dearth of new material meant that the belated return of Lost last week was a major television event, with ABC promising to screen the eight completed episodes even though the second half of the season – and the resolution of dozens of plotlines – has yet to be filmed.

The strike is likely to be called off as soon as the guild's board approves a deal, possibly this Friday, although the contract will have to be ratified by its 10,500 members.