The head of Britain's leading modern arts institute has accused the Government of undermining the rights of the mentally ill through measures proposed in the draft mental health Bill.

This month, the Institute of Contemporary Arts launches Britain's first national festival dedicated to film portrayals of mental distress. Reel Madness is a four-day event organised by the ICA, the Documentary Filmmakers Group, Mental Health Media and Rethink, a mental health charity.

Philip Dodd, the director of the ICA, said the Government was ignoring the needs of people suffering from mental distress. "It's a classic Blair Bill; this government is full of moralists," he said. "Some of the proposals are good, but it's a curate's egg."

The Bill was surprisingly dropped from the Government's legislative programme after pressure from mental health experts and charities and a sustained campaign by The Independent on Sunday. But it could be reintroduced at any time.

Mr Dodd also questioned the value of Hollywood films such as A Beautiful Mind which "romanticise" mental illness. "There is a deeply sentimental attachment [with Hollywood films]," he said. "If you are depressed it's because you are a genius and it's all part of the process. The reality is that it's terrible."

The films and documentaries in the ICA season, which begins on 19 June, have been selected by a panel that includes service users, mental health charities and health professionals.

The season includes accounts of manic depression and schizophrenia, experiences of group therapy and institutions, and one person's account of her mother's depression and suicide.

Dame Judi Dench has been appointed patron of the ICA film season which will feature seven UK premieres including Completely Cuckoo, an American documentary about the making of One Flew Over the Cuckoo's Nest.

Film-makers and health professionals will also take part in debates on the portrayal of madness in film, medical advances and the rise of the mental health service user movement.

The Independent on Sunday is campaigning for better treatment for people suffering from mental distress including those held in secure hospitals who should have been transferred to less secure accommodation.

Mr Dodd, who has first-hand experience of visiting friends in mental hospitals, said that mental health had become a "forgotten issue" and the Government's main concern was getting people off the streets instead of dealing with their mental health problems.

"We have not come up with a substitute for mental institutions," Mr Dodd said.

Andy Glynne, director of the Documentary Filmmakers Group, said part of the aim of the season was to demystify mental health and to give voice to an area which he said was often ignored by British film-makers.

"There is a zeitgeist in British broadcasting and film at the moment which does not seem unduly concerned with issues such as mental health - it's considered too serious," said Mr Glynne, a trained clinical psychologist.

"This is to give a platform to the survivors of mental distress. A number of the films are made by survivors themselves or by family friends."