Britain to get its own Tinseltown as industry booms

British cinema's struggle to beat Hollywood at its own game received an unlikely boost yesterday with the unveiling of a £66m plan to build Europe's largest film studio in the West Country.

The Full Picture Company, a consortium of UK investors led by the Oscar-winning film designer Peter Lamont, hopes to open for business by 2005 and capitalise on a resurgence in British cinema production. With 17 movies in production across the country, among them The Importance of Being Earnest, the British film industry is enjoying an unprecedented boom, worth an estimated £230m.

The new complex, to be built at one of four locations in Devon or Cornwall, will include six separate film studios including one twice the size of the largest in Europe, Pinewood in Buckinghamshire.

If planning permission is granted, the project's backers expect it will offer an alternative to not only Pinewood and Shepperton Studios in Middlesex – now under joint ownership – but also to Tinseltown.

Mr Lamont, who has worked on 16 of the 19 James Bond films and won an Oscar for his art direction on Titanic, said: "There is room in Britain for another large facility to make big, multimillion-pound productions with all the on-site facilities that people need.

"We have a reputation for technical excellence in this country which can be married to the advantages of the south-west in terms of location, weather and cost. It can easily be an annex for Hollywood."

The impresario, who is beginning work on the next 007 film – Bond XX – to be made at Pinewood, is looking at four places in Devon and Cornwall for the Full Picture Company.

As well as its sprawling sound stages, it will have two television studios, special effects workshops, post-production facilities, a hotel and a tourist attraction. The South West Film Commission, which is responsible for attracting foreign film makers to the region, believes it could bring trade worth £125m a year and create 200 permanent jobs.

But a senior executive with a film-funding agency expressed scepticism about the scheme, saying: "Spending less than £100m on a studio is not, in a multibillion-pound global industry, very much.

"It will be difficult to produce the very cutting-edge technology and site that the largest Hollywood studios – or even British producers – demand on that sort of budget."

The new studio will also have to compete with other UK facilities, such as Leavesden Studios, where the Harry Potter movie was filmed earlier this year, and Ealing Studios, which is undergoing a £50m refit.

The project nonetheless comes at a time of huge inward investment in Britain's film facilities as Hollywood studios, which are still reeling from the effects of the industrial dispute with actors and screenwriters, look abroad.

The success of films such as Bridget Jones's Diary and Lock, Stock and Two Smoking Barrels has persuaded British and American directors that the UK can make the blockbusters that were previously the domain of Hollywood. Among the American stars who have flocked to these shores in recent months are Nicole Kidman and Meryl Streep, who are making The Hours, a film about Virginia Woolf.

While many American-backed films have been made at Pinewood and Shepperton studios, or at locations in the south of England, film makers are now heading far and wide in the UK. Films are currently being made in locations from Cornwall to the Outer Hebrides with Scarborough, for example, playing host to the star, Christina Ricci.

The weakness of the pound against the dollar – the international currency for film making – and cultural links with America have been instrumental in persuading Hollywood to come to Britain.

But experts say that both the Full Picture Company project and the UK film industry as a whole still have potentially fatal weaknesses.

Martin Spence, the acting assistant general secretary of the BECTU media union, said: "Around 75 per cent of the money in the industry comes from America. Britain hosts films rather than makes them.

"If that money goes away in an American recession then it spells huge trouble. A stand-alone British film industry is still a long way away."