Dir: Jafar Panahi. Iran-Italy. 2000. 91 mins.

Prod co: Jafar Panahi Film Productions. Co-prod: Mikado Film, Lumiere & Co (It). Int'l sales: Celluloid Dreams (33) 1 4970 0370. Prod: Jafar Panahi. Ass. prod: Mohammed Attebai. Scr: Kambozia Partovi. DoP: Bahram Badakhshani. Prod des: Iraj Raminfar. Ed: Jafar Panahi. Main cast: Fereshteh Sadr Orafai, Fatemeh Naghavi, Nargess Mamizadeh, Maryam Parvin Almani.

Once again, an Iranian director has scooped a major festival prize with a passionate, low-budget feature. The Circle, by White Balloon director Jafar Panahi, dramatises the condition of women in modern Iran, where they are hedged about by legal restrictions and social taboos. They can't buy coach tickets or check into a hotel alone, are frowned on if they smoke, cannot obtain an abortion without the permission of husband or family, and have to keep a chador ready to cancel their identity when entering public buildings. The film opens with the off-screen birth of a girl - an event greeted by the mother's family as a major tragedy.

The Venice jury stuck to the script when they awarded this powerful feature the Golden Lion for best film; but the lack of significant competition and the director's courage in making this were, one hopes, not the only factors. Like La Ronde or Short Cuts, The Circle switches between stories, the effect being to underline the director's point that Iranian women are so downtrodden that "it as if each woman could replace another in a circle".

The film follows the day of three women who have just been released from prison (their crimes, or offences to the regime, are never specified); struggling to make a go of it, they are inexorably dragged back to where they started from by the hostility of family, bureacracy and the law. It's not an easy structure to get right (the audience has to be taught to let go of its emotional investments each time the baton is passed), but Panahi manages it brilliantly - helped along by the bravura of a mostly female cast.

The Circle raises the paradox that a social condemnation of this kind can only be made, and exported, in conditions of relative artistic freedom. Even five years ago, this film would never have been granted an export licence, and it will be a long time before we see a Loach-like critique this strong emerging from, say, Afghanistan or Burma. On the back of its Venice prize and its own strengths, The Circle will achieve worldwide distribution on the arthouse circuit - something that will do no harm at all to Iran's efforts to show a more liberal face to the outside world.