Russia's moribund film industry in search of post-Soviet salvation

Once upon a time, the Mosfilm studios in the Lenin Hills overlooking the Moskva river, was a name to be reckoned with. All the great directors of Soviet cinema, from Sergei Eisenstein to Andrei Tarkovsky, worked here. The opening titles of every Mosfilm production – the Soviet equivalent of MGM's roaring lion – showed one of the most famous Communist statues, depicting an industrial worker and a collective farm girl who stride together into the bright Soviet future. The confidence seemed to reflect the confidence of Mosfilm itself.

Now, all that is gone. Moscow's 23rd international film festival, which began on Friday, includes 200 films in 12 locations. Not one Russian film is in the running for the competition. Russia's cinematic glory days seem little more than a memory – though some hope that a turnaround may finally be on the way. "We used to make 60 films a year; last year, we made just one," is the mournful lament of one Mosfilm employee. The studios' last great success, Nikita Mikhalkov's Oscar-winning Burnt by the Sun, an elegiac story set in the Stalin era, was released seven years ago. His £30m Barber of Siberia was disastrously received on its release in 1999.

The sprawling 34-hectare site has an overgrown and forgotten feel – a dowager living on the memories of a more glorious past. The studios' custodians wistfully display collections that reflect the studios' history. Elaborate costumes from past productions, produced by an army of in-house seamstresses, are on show in a special museum for visitors. Elsewhere, huge rooms are filled with more than half a million costumes that can theoretically be used in new productions; but they are now rarely needed.

In one corner of the grounds is a collection of vintage vehicles, all of which have starred in Mosfilm productions, including a 1913 Rolls-Royce that belonged to Lenin and a 1948 Land Rover.

The studios also own the Zil limousine used by the former Soviet leader Leonid Brezhnev. (I am permitted a quietly surreal moment when invited to ride inside the limousine, comfortable but oddly characterless with its muddy-yellow velour seats and copious walnut panelling. When I lived as a student in the Soviet Union in the Brezhnev era I once glimpsed the old monster's motorcade sweeping in through the Kremlin gates; at that time, even a glance inside the curtained Zil would have seemed unthinkable. Now, the former symbol of omnipotence is just another souvenir of a bygone era.)

To hear the director of the Mosfilm studios talk, all is looking rosy. Karen Shakh-nazarov says foreign film makers now often use the studios' facilities. Japanese are currently using sound studios to record some music; the Spanish are recording a soap opera. The studios used to employ 6,000; now, there are just 700 permanent employees. On one day last week, the most active work in hand was the filming of a commercial for processed cheese, which involved pink Teletubby lookalikes on the moon. Eisenstein, director of The Battleship Potemkin – would not necessarily have been impressed.

The situation seems unlikely to continue unchanged. Earlier this year, Vladimir Putin signed a presidential decree paving the way for the privatisation of the Mosfilm studios. Mosfilm is resentful at the prospect.

Mr Shakhnazarov insists that this is not just a film studio, but "has come to occupy a real place in Russia's cultural life". In many respects he is right, though it is difficult to see how the faded giant can survive without radical re- invention. The expert sound-effects specialists – whose roomful of basic equipment enables them convincingly to imitate the sound of everything from waves breaking on the beach to feet walking through crisp snow – are understandably proud of their unusual skills. But their future, too, is unclear.

The Culture Minister, Mikhail Shvydkoi, suggested that Mosfilm's reason for resisting privatisation was partly because the management of the studio had sought to make money on the side by sub-letting parts of the site for light industry, including even a factory for the manufacture of plastic bottles.Mr Shakhnazarov initially says that he has never heard any such suggestion before. When pressed, however, he agrees that he is familiar with Mr Shvydkoi's allegations. He insists – as he did when Mr Shvydkoi first made his accusations – that the allegations are quite unfounded.

There is no sign of bottle makers at Mosfilm. But there is not much sign of anything else, either.

The Russian government is eager for the country's once great cinema industry to become a force to reckon with once more. If that happens, the now sleepy site on Mosfilmovskaya Street will look very different.