Leading figures in theUK film industryare remaining upbeat about the prospects for the territory despite theimpact oftheHollywood writers' strike on shoots.

Ron Howard's Angels & Demons, Ridley Scott's Nottingham and the Jerry Bruckheimer-produced Prince Of Persia have either withdrawn from the UK or been postponed.

The WGA strike is having an impact, concedes UK film British Film Commissioner Colin Brown.

'The British industry, because it is so allied with the US industry, has caught a cold because of what is going on over there.

'There was a great deal of hope that it would be a relatively short, symbolic strike and that it would put them (the Hollywood studios) in good shape to understand what the actors and directors would wan,' says Brown.

'It hasn't turned out like that. The writers are taking a lot of heat for the actors and directors who it was expected would be the most vociferous to deal with'

'It (the strike) has made it much harder putting things together. Even if you have a script ready to go, if it has a WGA writer attached to it, you're not in a position to go back to them in terms of any re-writes,' says Peter Carlton, senior commissioning executive at Film4. 'It is proving very difficult to set up anything that has American cast or potentially involves American unions.'

'The writers' strike has affected a couple of our projects,' adds Jane Wright, Commercial Affairs and General Manager of BBC Films.

She adds that the prospect of an actors' strike in Hollywood later in the year is also having an impact. 'For some of our bigger projects that might require a star who is a SAG (Screen Actors Guild) member, there's a lot of competition.'

Still, bookings at British studios remain relatively robust. For instance, Richard Curtis' new Working Title comedy The Boat That Rocked will shoot in the UK. The new film in the 007 franchise, Bond 22, is shooting at Pinewood.

Meanwhile, such projects as Paul Greengrass' Green Zone (formerly titled Imperial Life In The Big City) for Universal is going ahead in the UK. The Wolfman looks as if it will shoot in Britain and the next Harry Potter movie is again set to shoot at Leavesden.

Matthew Vaughn and Kris Thykier's MARV Films has several projects in development after its hit with Stardust, and Aardman has a full slate of six animated projects in the works - with two that could be greenlit in 2008 - with its new first-look deal with Sony in place.

If there has been a slight slowdown in inward investment, Brown points out that this may have benefits for local producers working in the UK in 2008.

'If you are a small independent and you can get your money together, you can probably get much better value on your film. There are people who otherwise would be working on one of these big inward investment movies.'

Low-budget, local production is unaffected by the strike. The question in 2008 is whether this kind of film-making will be able to find a substantial audience.

Some cite the example of Shane Meadows' This Is England, a film that generated huge interest and positive reviews and yet still made less than $4m (£2m) at the box-office, as evidence of the difficulty that even the best UK films face in reaching a mass public.

'Even though it (This Is England) has done very well on DVD, it feels as if there is a two-nation system - if you are a studio movie or have studio backing, you have the clout to get a movie into the multiplexes and make it stay there. If you don't we have seriously to look at other ways of distributing, whether it is the digital screen network or using online,' says Carlton, who worked on the project through Film 4.

The UK 's new tax credit system is now in place and appears to be working well.

'It has become a quite reliable and user-friendly investment tool,' says Carlton. 'While it is a very useful part of your financing, it is not the thing that gets films made.

Films are not being made for tax reasons now - they are being made because someone genuinely believes they should be made.'

'Everybody is really happy with the tax credit and the way it is working,' agrees Jane Wright. 'It is straightforward and easy to administer.'

Still, there is now ferocious competition for US production, not just from European studios but also from US states, many of which now offer their own tax incentives.

With a still punishing exchange rate (of over $2 to £1), the UK can prove an expensive place for US producers to work. Meanwhile, co-production remains an area of concern.

'We have to look at co-production very, very carefully. The way the new tax break works is not nearly as advantageous as the old one - and that is just mathematics,' says Brown.

Even so, at the beginning of 2008, British producers are striking a bullish note about prospects for the year ahead.

'There are a lot of interesting, eclectic voices out there. It is not just Working Title continuing to go from strength to strength but independents,' says DNA 's Allon Reich, citing films like Control and Son Of Rambow as examples of the diversity of talent now at work in the UK. DNA 's most advanced projects for 2008 are its big-screen version of The Sweeney and its Kazuo Ishiguro adaptation, Never Let Me Go.

In addition to its low-budget fare through Warp X, Film4 also has several other high-profile projects likely to be ready in 2008, among them Peter Jackson's Lovely Bones, Danny Boyle's Slum Dog Millionaire (already shooting in India) and the Toby Young adaptation, How To Lose Friends And Alienate People (in post-production after a UK and New York shot). Steve McQueen's Hunger, about IRA hunger striker Bobby Sands, may also also be completed by the early summer.

Underlying the diversity of films currently being made in the UK, the Brits have some high-profile cosutume dramas set for release in 2008, among them Brideshead Revisited and The Other Boleyn Girl, both projects backed by BBC Films, which now has a new management structure in place as well as an extra $4m a year in its annual budget (now at $24m.)

'The increase in funding was exciting news not just for us but - I hope - for the whole industry,' says Jane Wright. 'Howe we are going to use it we are still thinking through. It (the new money) doesn't come on line until the beginning of the new financial year (in April).'

BBC Films has a number of projects in post-production, including Wales-shot The Edge Of Love starring Keira Knightley, and The Damned United, on which BBC Films is partnering with Andy Harries' Left Bank Pictures, is due to begin principal photography in Yorkshire in April.

Meanwhile, BBC Films' first collaboration with comedian/satirist Amrnado Iannucci is likely to shoot this year. A new Pawel Pawlikwoski project is picking up speed. The Beeb is also partnering with Pathe on Jane Campion's John Keats project, Bright Star, due to shoot later in the year.

'Money is going to be tighter (in 2008),' producer David Thompson (former head of BBC Films) suggests. 'Hedge Funds, credit - all these things are real issues.

Another negative factor is that there are too many films being made. When you open the papers and see 12 films reviewed each week, you think 'bloody hell!' But the positive factor is that there are more and more good projects in Britain around which can make some real noise.'

'The underlying strength is good,' agrees Colin Brown. 'I do feel we have our heads screwed on and we know where the risks lie.'

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