Big budget films like Harry Potter are key to Pinewood's future

The firm has won approval for plans to expand and improve its Shepperton studio in Middlesex, home of the James Bond and Harry Potter film franchises.

Under the proposals Pinewood will build new "state of the art studio facilities", including stages, workshops and production offices.

The upgrade is part of Pinewood's 10-year strategy to improve growth.

In June, the firm warned interim profits - due out later this month - would come in below the expected �2m as the studio weathered tough market conditions.

Tax worries

Uncertainty over tax breaks for UK-made movies had taken their toll, with at least one Hollywood production delaying filming.

Some of those concerns were lifted last month when the government unveiled plans for a "Britishness" test to determine whether films could qualify for tax relief.

However, in a bid to improve its fortunes Pinewood said it was looking at ways to "improve profitability".

"Shepperton Studios has a long history of hosting acclaimed media productions but has recently been constrained by the age and scale of some of the original facilities," said chief executive Ivan Dunleavy.

He added the approval for the plans at Shepperton, as well as those gained for the revamp of Pinewood in Buckinghamshire earlier this year, represented "a further significant step" to ensuring the success of the business.