Cheers for UK hits but boos for City

British movie makers yesterday uncorked the champagne to celebrate a bagful of Oscar nominations, but threw in an important reservation before they knocked it back: theirs was a triumph despite, rather than because of, the British government and the City's wary financiers.

Three low-budget, British-made movies won a variety of nominations of this year's Academy Awards, yet again demonstrating to the US film industry that it is possible to make successful (and excellent) films for less than a third of the $32m (£20m) average cost of a Hollywood production. But industry insiders pointed out that their success will not produce the kind of financial dividends in the UK that would have been won with a more positive attitude from the government and financial institutions.

While the French continue pressing for quotas, the emphasis among British moviemakers was on the lack of incentives from Westminster, and the overly cautious City.

"We have a fiscal environment in Britain that is deeply discouraging," said Peter Samuelson, co-producer of Tom & Viv, which won nominations for Miranda Richardson (best actress), and Rosemary Harris (best supporting actress).

The movie, the story of the chequered love affair between T S Eliot and his first wife, illustrates his point.

Even though it only cost $10m (a relative pittance by Hollywood standards), it took several years to raise the money. And when backers were found two-thirds of the cash came from the United States and France, from financiers who will now strike it rich. The film has already gone into profit, even before opening in the United States's huge market. "There is a gentleman in Paris who has had a 150 per cent return on his money," said Mr Samuelson, "It's just a shame that the money is not going to Britain."

Such views were echoed by Davina Belling, co-chair of the British Academy of Film and Television Arts in Los Angeles: "We are delighted with the results, but why is that when British producers want to make a British film they have to go to half a dozen different sources?"

The issue is under review by the National Heritage Committee, although industry sources are pessimistic about the outcome - and some privately question the expertise of the sitting MPs.

Although attention in Hollywood last night focused on the extraordinary success of Forrest Gump, which won the most nominations (13) since Who's Afraid of Virginia Woolf in 1966 - Britain's success was not unnoticed. It was represented in all of the major categories, except best director.

The Madness of King George, another British project which relied on American money, won a place in the Best Actor's category for Nigel Hawthorne and nominations in best supporting actress (Helen Mirren), art direction, and adapted screenplay.

The British smash-hit Four Weddings and a Funeral was nominated as one of the year's best films, but there was nothing for its leading actor, Hugh Grant. And Paul Scofield won a place on the best supporting actor's list for the US movie, Quiz Show. The winners will be announced on 27 March.