Bond defects to the East as Britain's tax regime bites

But a repeat of the opening sequence of 1999's The World Is Not Enough or scenes featuring similar quintessential British locations appeared less likely yesterday after it was confirmed the bulk of filming on the new 007 movie was to take place in the Czech Republic.

Instead of battling villains from behind the Iron Curtain in the familiar surroundings of the Pinewood Studies in Buckinghamshire, or Leavesden Studios in Hertfordshire, Bond and his team are heading for Eastern Europe, lured by low costs.

The decision, revealed by Martin Campbell, the director of Casino Royale, is a further blow for the British film industry, which has lost several films because of uncertainty about tax breaks.

The move confirms a trend towards making films in Eastern Europe where the costs of about £100m for a Bond film can be cut significantly.

The key to that is lower wages for behind-the-scenes personnel, ranging from catering to set-builders and film extras, all much lower abroad.

Recent examples of such migration include Roman Polanski's Oliver Twist, which was filmed on location in Prague and in the Barrandov studio on the outskirts of the city, where Bond will also be filmed. The feature length version of The League of Gentlemen was also filmed in a studio in the Czech capital, as was Blade.

In a battle for new business, Romanian studios are attempting to undercut the previously lowest prices of the Czech Republic and recently hosted the studio production on Anthony Minghella's Cold Mountain.

"We'll be shooting a little bit at Pinewood but not much" said Mr Campbell.

He added: "We're going to be in Prague, maybe Italy, Bahamas and places like that. Like everybody we are heading off to where we can get a good exchange rate."

Tim Dans, the associate editor of Screen International, said: "Normally, Bond shoots around the world at lots of exotic locations but this seems to be the first time that significant amounts of studio-based work has gone abroad.''