Taking a huge step in creating the western world's biggestdigital cinema network, Government-backed support body UK Film Council has selected an offshoot ofventure capitalist Arts Alliance to install a nationwide digital circuit of 250screens.

Under the £11.5m contract, Arts Alliance is to spearhead theinstallation, training, servicing and upgrades over an 18-month roll-out periodand for a further four years. Christie Digital Systems and Digital ProjectionInternational will supply 2K DLP Cinema(tm) projectors while QuVis will supplyservers.

Fears that new technology will render 2K obsolete havedelayed such ambitious digital initiatives from the private sector, but FionaDeans, associate director of Arts Alliance Media, said: "2K is a fantastictechnology that compares favourably to 35mm. There may be the potential for ahigher resolution, but that doesn't mean that this will not be acceptable."

Cinemas will now bid to join the initiative, with thewinners to be announced in May. In return for being equipped for the digitalage from the public purse, cinemas must commit to screening a minimum number ofspecialised films, which the council hopes will massively broaden the diversityof films on offer nationwide.

"Access to specialised film is currently restricted acrossthe UK," said Peter Buckingham, the council's head of distribution andexhibition. "Although a genuine variety of films is available in central Londonand a few metropolitan areas, the choice for many outside those areas remainslimited."

Arts Alliance, which will manage the contract through ArtsAlliance Digital Cinema, has invested in new media companies such as Atom Filmsalong with online DVD rental service Lovefilm. It has a controlling stake in UKexhibitor City Screen and was behind what was billed as the first HD digitalscreening in the UK of a film, Peter Greenway's The Tulse Luper Suitcases.

Deans denied that Arts Alliance's stake in City Screen gavethe exhibitor an unfair advantage in the process of selecting which cinemasjoined the scheme, as the decision is down to the council and independentassessors.