Disney turns to Ealing Studios for animation

A new generation of animated films is to be made in Britain after the man who created the cult hit Shrek struck a multimillion-pound deal with Walt Disney.

Disney executives have agreed to back the next three animated feature films by John Williams, the producer of the Oscar-winning story of an ugly monster.

All the films will be made at Ealing Studios, west London, which is being regenerated after it was bought two years ago. The deal will bolster the development of animated studios at the complex.

Barnaby Thompson, the head of the studios, said: "It's a great boost for the animation business and a great boost for the Ealing Studios. It's an opportunity to build something here that could become a real flagship for European animation. Disney's output is all English stories, things like Winnie the Pooh, and it would be great if we could find a way of making these films here but with the muscle of a great American distributor behind them."

Mr Williams' decision to make his new movies in Britain comes as costs are soaring in Hollywood, causing the loss of productions and jobs.

The team at Ealing are aiming to produce feature films for less than £26m – compared with at least £52m in the United States – and in half the time. Work on the first film, Valiant, about a wartime carrier pigeon, starts this year with a release planned for 2004.

The venture will be closely watched by the American studios because it represents the first serious challenge to the dominance of US-based companies in the fast-growing field of computer-generated images.

Disney has had little success with its own in-house computer animation operation, best known for Dinosaurs, and has slashed its workforce and budgets. But the company's executives appear to have decided that backing production makes sense to in Britain, the country where it has traditionally found many of its animators.

The backing comes in the form of the advance purchase of the American rights from Vanguard Films, Mr Williams' production company.

Mr Thompson said that working with Vanguard and Disney as partners was a big bonus. "These are the best and the brightest," he said.

"Animated films haven't been made in Europe for a long time and there certainly hasn't been any proper, large-budget, computer-generated image movies made here – I'm 99 per cent sure of that."

The tough financial climate in America had obviously contributed to the decision to invest in Britain, where European Union tax breaks helped reduce budgets, he said, adding: "But there is also a great talent pool here you can call upon."

Ealing Studios was bought by a consortium including the Manhattan Loft Company and Fragile Films two years ago and the new owners are now trying to return the studios to their glory days, when the name was synonymous with British comedy. They hope to attract the best comedy writers and performers to work on film and television productions at the studios.

The first Ealing comedy since 1959, The Importance of Being Earnest with Rupert Everett and Colin Firth, had its première last week.