The Film Council has revealed that it ended its first full financial year with a surplus of �75.9m.

The body, which is funded in part by the National Lottery, recorded the surplus for the financial year ending in March 2001 despite an income of just �74.8m.

But the Film Council has denied that it has underspent - and told BBC News Online that of the apparent surplus, �65.2m was already committed to film projects.

The council recently backed a film about Bloody Sunday

The organisation, set up by the Government, exists to back new films and training with money from the National Lottery.

More detail about the Film Council's funding and activities will be revealed on Monday, when the body's annual report is published.

A Film Council spokesman told BBC News Online: "We allocate money throughout the year in what are called 'soft' commitments.

"But this money is not drawn down when the award is made, although it has already been committed."

Distorted

Consequently not all commitments immediately show up in the Council's balance sheets.

It said that the financial year 2000-2001 was also distorted by a funding carry-over from the previous years, when the body was set up.

The Council received �16m from the Lottery in the first nine months of its existence, a large part of which - �14.2m - was carried over into its surplus in the year 2000-2001.

The organisation was set up in July 1999 to fund and train film makers with the intention of creating a "sustainable film industry for the future" in the UK.

Much of the Council's emphasis has been on backing potential commercial successes, after criticism that its predecessor bodies such as the Arts Council and the British Film Institute tended to back "artistic" films that rarely made money.

Successes for the Film Council include the Ricky Tomlinson vehicle Mike Bassett: England Manager and the recently-acclaimed Gosford Park.