Producers say filming is set to start in Wales in April 2007

The Hollywood actresses have signed on for the film, which centres on events in New Quay in mid Wales in 1945.

Teen idol Lohan will play Thomas' wife Caitlin while Pirates of the Caribbean star Knightley will portray his childhood friend Vera Phillips.

The UK production company said the aim was start filming in April in Wales.

The movie centres on a real-life attack on Thomas' home by Phillips' husband William Killick, when the poet lived briefly in New Quay with his young family.

Killick had returned home from a mission behind enemy lines in Greece. Stressed, strained and fatigued he was not pleased his wife's close friendship with Thomas.

'More casting'

Following an argument in a pub he went home, armed himself with his service weapons, including a machine gun and grenade, and attacked Thomas' house.

With a working title of The Best Time of Our Lives, the film is being produced by UK-based Sarah Radclyffe Productions and Rebekah Gilbertson, the granddaughter of Phillips and Killick.

John Maybury, who made The Jacket, which also starred Knightley, is set to direct. and the script is reportedly being written by Knightley's playwright mother Sharman Macdonald.

A spokesman for Radclyffe told BBC News both Knightley and Lohan were on board.

"There's more casting to be done. We have still to cast the roles of Dylan Thomas and William Killick," he said.

"It's very much the plan (that it will be filmed in Wales) and that's the way things are heading."