Cameron Diaz: Lucrative return as voice of Princess Fiona

The film's comedy, characters and ground-breaking computer technology made the original film the second biggest box office hit of 2001 in the United States - only beaten by Harry Potter.

There have already been reports that Diaz will earn $10m (�7m) for working for just one week on the follow-up.

"They're not recording yet because the final script isn't done yet, but they've all signed on," said Chip Sullivan, spokesman for film studio DreamWorks.

The only star of the original film who has not yet confirmed his participation is John Lithgow, who provided the voice for the evil Lord Farquaad, who was eaten at the end of the first movie.

"So I don't know whether he comes back or not," Mr Sullivan said.

Eddie Murphy won an award for his role

The sequel is due to be released in 2004, and there are no details of what the storyline will be.

The first film took up to 300 people two years to bring to life, taking more than $470m (�333m) at cinemas around the world.

It earned the same amount again through video and DVD sales and rentals, making it the biggest-selling video and DVD release of 2001 in the US.

Shrek won eight of the International Animated Film Society's awards last year, including one for Eddie Murphy for his voicing of the enthusiastic but dim-witted donkey.

It was also nominated for a Golden Globe and will be considered in a new Oscars category for the best feature-length animation.