Films with budgets at a similar level to Calendar Girls will benefit

They will be entitled to government subsidies worth up to �4m per film, under new Treasury measures.

Producers of films with budgets up to �20m will also receive a 50% tax waiver on their production costs, on condition that the film makes a profit.

The scheme - which comes into effect next July - was welcomed by the UK Film Council as "extremely good news".

Direct payment

It will apply to lower-budget films, a category which included British hits The Full Monty, Bend It Like Beckham, Calendar Girls and 28 Days Later.

Subsidies worth up to 20% of the film's budget will be paid directly to producers on completion of the film. At present - under the Section 48 scheme, which the new policy replaces - this sum goes to the third parties who fund the films.

The relief delivers on our determination to remain a major centre for international film-making Estelle Morris, films minister

If a film fails to make a profit, producers will be entitled to a cash payment from the Inland Revenue of 20% of its budget.

The government felt the existing relief scheme was open to abuse, but when the tax loophole was closed in February the funding for a number of British films was put in jeopardy.

Films minister Estelle Morris said the new scheme "underlines the government's commitment to a stable, sustainable and successful film industry".

'Welcome recognition'

"In particular, the relief delivers on our determination to remain a major centre for international film-making," she said.

Major British movies currently being filmed in the UK include Batman Begins, The Hitchhiker's Guide to the Galaxy and Pride and Prejudice.

The UK Film Council's chief executive, John Woodward, said the relief scheme gave "welcome recognition" to the British film industry's "economic and creative importance".

"As with Section 48, the new tax credit will take a few months to bed down," he said.