The amount of money spent on tax breaks for high earners who invest in UK film-making is set to exceed the Treasury's budget plans by more than five times.

The tax relief was first introduced by the government in 1997, and allows investors to get immediate 100% tax relief on money invested in UK films.

It is estimated that in 1999/2000 the scheme generated some �500m worth of film production.

But the cost to the taxpayer has grown more rapidly than Chancellor Gordon Brown had planned.

Tax rebate

The tax relief has cost �400m in this tax year, accountancy firm Grant Thornton has told the BBC.

This is up from an average of less than �70m in previous years.

Through a complex arrangement, investors in the scheme get a guaranteed income even if the film flops. They can then collect a big tax rebate.

Critics say the growing popularity of the scheme with high earners has more to do with sheltering money from tax than with improving the UK's film industry.

Mr Brown announced last March that the tax relief would be extended until April 2005.

There is little doubt that the scheme has helped the UK film industry get back on its feet.

Last year film production in the UK was up by a third, thanks to movies such as 51st State and Harry Potter and the Philosopher's Stone and Tomb Raider, both part-funded by the UK.

Between 2001 and 2002, the Film Council, set up by the government to channel all public money for the UK film industry, has �57m at its disposal.

This includes �20.8m from government grant-in-aid, and �36.2m from the lottery.

The Harry Potter sequel is one of a host of films currently shooting in the UK.