By Ian Youngs BBC News Online correspondent in Cannes

Cinema audiences can look forward to sharper images

The move will make it easier for movie-lovers to see arthouse films because distribution costs will be slashed, the UK Film Council has said.

Digital projectors do not require reels of film, can receive films by satellite and provide higher-quality screenings.

The new network will double the world's total of digital screens.

In March, there were 190 digital projectors around the world - with fewer than a dozen in the UK.

�1,000 prints

The 250 new projectors will be installed in about 150 cinemas across the UK by the end of 2004, the UK Film Council has said.

Currently, arthouse and specialist films usually get issued with between 20-70 prints, which cost �1,000 a time.

Cinemas with digital projectors will have to dedicate a portion of their screening time to niche films to ensure there is more choice for their customers.

"Unless they live in a small number of major cities, cinema-goers in the UK often have an extremely limited choice of films available to them," UK Film Council chief executive John Woodward said.

"The aim of the network is to use state-of-the-art technology to cut the cost of distributing films."