Wizard of Oz or Down Under disaster movie?

Whether it is the country's greatest cinematic feat or its costliest folly, Baz Luhrmann's 'Australia' opens this week – and he has yet to finish it

Australian director Baz Luhrmann took some work home this weekend. His task: to finish editing the country's most expensive film ever in time for its world premiere in Sydney on Tuesday.

Whether he had completed the final cut of his epic outback romance Australia – starring Nicole Kidman and Hugh Jackman – Luhrmann was not saying yesterday. But the late scramble was only one of the worries facing executives at 20th Century Fox, which provided the £88m funding. Studio bosses were reportedly still arguing with Luhrmann last week about the length of the film, and about the ending, which originally had Jackman's character – Kidman's love interest – dying. Luhrmann has angrily denied that he has been forced to give the 150-minute movie a happy ending, and more love scenes.

The film – a Second World War drama set in Australia's rugged interior – has also been panned by preview audiences, according to industry rumours. One Sydney newspaper predicted: "It's set to be either Australia's most fabulous cinematic feat – or its costliest folly." On top of that, the movie is also said to romanticise the situation of Aboriginal stockmen in the 1930s. In reality, Aboriginal people worked for outback ranch owners for little or no money, often just basic food rations and tobacco, and were treated as second-class citizens who were not permitted in the cattle companies' cars and trucks.

Much is riding on Australia. The hope is that it will not only be a critical and commercial success, but will revive the fortunes of the country's film industry, which was accused last week by Antony Ginnane, president of the Screen Producers' Association of Australia, of producing "dark, depressing, bleak pieces that are the cultural equivalent of ethnic cleansing".

With Australia's tourism industry in the doldrums, the movie has even been given the role of reawakening interest in the country overseas. Luhrmann, director of Moulin Rouge and Strictly Ballroom, was commissioned to make a series of tourism ads to tie in with its release.

In Australia, Kidman plays an English aristocrat who inherits a vast rural property. Jackman is a taciturn drover who helps her herd 2,000 cattle hundreds of miles cross country. The pair will attend Tuesday night's premiere, along with Brandon Walters, the young Aboriginal star of the film, at a cinema in Sydney's George Street. The Sydney tabloid The Daily Telegraph breathlessly reported that the city centre street will be closed to traffic from 2pm, because of the expected crowds. The red carpet, the paper added, will be 443ft long.

Despite the dire reports, Australia has received influential support from the US talk-show host Oprah Winfrey. She devoted the whole of her show to the film, with Kidman and Jackman as her special guests, and described it as "the best movie I've seen in a long, long, long, long time".

Outback on screen

‘Crocodile’ Dundee

The plot: Leathery hunter-gatherer woos New York sophisticate

Tourism potential: Might attract female visitors seeking an alpha male

Muriel’s Wedding

The plot: Downtrodden Muriel dreams of the perfect marriage ceremony

Tourism potential: Not much – her home town is called Porpoise Spit

Picnic at Hanging Rock

The plot: Girls in Victorian dresses drift about to Beethoven and Mozart

Tourism potential: The bush country looks beautiful, but don’t get lost!

Priscilla, Queen of the Desert

The plot: Transvestite scours the outback for his long-lost son

Tourism potential: Cross-dressers will find a lively scene in Sydney, but best to keep it straight elsewhere