It's high noon for UK films

To help Britain's movie sector, Tony Blair must face down Clinton, Murdoch and Hollywood

TONY BLAIR's programme to boost the economy by promoting creative industries faces an acid test with the release on Wednesday of the Government's long-awaited action plan for the film industry.

Polygram International president Stewart Till, who with film minister Tom Clarke co-chaired the group drafting the plan, says it will tread a fine line between helping British companies and not antagonising Hollywood, whose investments also help the sector. "Squaring this circle is the essence of the report," he says.

But sceptics say the plan will leave Britain's film industry where it has always been - a Hollywood talent scout and sub-contractor with no hope of developing into a significant export earner. "Blair is afraid to take on Hollywood because thatmeans taking on Clinton," one senior British film executive said. "Taking on Clinton means risking the President's help on other issues, like the Irish peace process."

The prospect of government timidity in the face of Hollywood is raising eyebrows across the channel in France, which has led the EU's fight against American movies. "I don't think the British socialists would be brave enough to take on Hollywood," said Yvan Thiec, who runs Eurocinema, a Brussels-based lobbyist for French producers. "Hollywood is also Fox, and that means Murdoch."

Final wording of the proposals is still under review, but the plan is expected to recommend lottery money for training and marketing assistance for British films. It may recommend relaxing the definition of British films so that international productions, including those backed by Hollywood, qualify for funds.

The Government declined to comment prior to publication. as did Christopher Marcich, head of the Brussels office of the Motion Picture Association of America. "This thing's so loaded no one's going to talk," said the senior industry executive.

The review is the climax of a series of events which have put the UK in the spotlight. First came the explosion of British actors and directors into Hollywood in the 1980s. Then came the emergence of London's animation and special effects houses working for Hollywood, and then the Major government's plan to provide pounds 92m in lottery funds to back the creation of three British mini-studios. Now come proposals to focus on the distribution of films as well as production. "Distributors are often overlooked but they are crucial to the industry's success," said Rupert Preston, head of Metrodome Distribution.

In addition to bankrolling producers, distributors pay up-front costs for prints and advertising. Big openings like Man in the Iron Mask, Jackie Brown, and Gattaca on Friday cost upwards of pounds 1m each. The distribution offshoots of Hollywood studios that can afford this money reap big returns from fees and side-deals.

The Film Consortium, set up with Lottery cash by four production companies and Virgin Cinemas, is close to an agreement with United International Pictures, the distribution offshoot of three major US studios, to distribute its films. The Arts Council will announce a plan later this year to subsidise British competitors to firms like UIP. "A mechanism is being put in place so that if a producer gets lottery money, his distributor can too," said Mr Preston. "The problem so far is that lottery money can only go for capital projects," said Hannah Leader, a partner in another London distributor, Capital Films.

But sceptics say government support for Britain's film sector will not alter its status as a Hollywood colony. "The review could recommend a penny levy on cinema tickets, rental videos, blank video tapes, things like that," said the senior executive. "But I doubt it will happen."