Secrets of the Raj safe as film exposé is put on hold

Studio bosses baulk at projected £24m bill for making 'Indian Summer'

News that British film-makers planned to lift the lid on one of the most sensitive chapters of the last days of the Raj – the love affair between Edwina Mountbatten and Jawaharlal Nehru – sent waves of panic through the modern-day Indian establishment when it was announced earlier this month.

The Delhi government, of which Nehru was the first prime minister following independence in 1947, demanded scenes be rewritten and depictions of physical intimacy be banned in exchange for granting permission to film. But now it seems it need not have worried about stepping in to safeguard the reputation of the founding father of the world's largest democracy – at least until the recession blows over.

Universal Pictures has postponed plans to start filming the adaptation of Indian Summer: The Secret History of the End of an Empire by the historian Alex von Tunzelmann, according to Variety magazine.

Due to star Cate Blanchett as the amorous English aristocrat, with Hugh Grant as her socially ambitious husband the last viceroy, studio bosses are said to have baulked at the $30m to $40m (£18m to £24m) price tag for the venture with Working Title Films.

Director Joe Wright, who had hoped to start filming on location in India next year, said the budget pressures in a difficult market had added to the already troublesome conditions of shooting a major film in India and forced the delay. It was claimed he had considered going ahead on a reduced budget of less than $30m, but decided to hold on for the extra cash with Universal.

"We were in between a rock and a hard place," he said. "The Indian government wanted us to make less of the love story while the studio wanted us to make more of the love story."

The film was due to tell the story of Lady Mountbatten's passionate relationship with the Cambridge-educated scion of the ruling Congress Party. Although their intimate friendship was an open secret among the upper echelons of Raj society, it has long been insisted that the affair never tipped over into the physical. Nehru's niece acknowledged in a television interview that, while they were most likely in love, it was a relationship based on "genuine respect and admiration". Such was the level of admiration that, when Lady Mountbatten died in 1960, Nehru sent a frigate to lay a wreath of marigolds at sea in her honour in the English Channel. Her body was said to be surrounded by letters from her Indian beau.

Film insiders said the decision to put the project on ice indicated mounting concerns over whether up-market historical dramas could continue be made in the current economic climate.

A decision was still pending on Mr Wright's desire to make a film on the Windrush generation – the Caribbean immigrants who arrived in Britain in the late 1940s and 1950s. The director's previous hits include Atonement and Pride and Prejudice.

Meanwhile, Working Title, whose most famous and biggest-grossing films include the romantic comedies and Hugh Grant vehicles Notting Hill and Four Weddings and a Funeral, has enjoyed success with grittier productions such as State of Play and Frost/Nixon. Last week it signed up to produce a Ryan Reynolds romantic comedy and is also developing a third instalment to the Bridget Jones series, starring Renée Zellweger.

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