French filmproduction levels dropped slightly in 2004 according to new figures from localindustry body the CNC.

Last year, 203films were produced or co-produced of which 167 were co-productions of Frenchinitiative.

This represents a4% drop from 2003 when 212 films were produced or co-produced with 183co-productions instigated by the French.However, 2004 was still the third best year for French production in thepast twenty years.

Investment in thefilms climbed to Euros 892m from Euros 789m the previous year.

The figures alsoshow that the French tax credit scheme launched early last year to stem runawayproduction appears to be working. Films shot for 913 weeks in France in 2004versus 785 the previous year when the scheme was not yet inplace.

CNC chiefCatherine Colonna noted that discussions would continue "as early as next week"regarding the idea of opening up France's soft money system to non-Europeans."Whatever has divided the industry on this point, I am convinced that thereexist simple solutions," said Colonna who asked professionals to neither"exaggerate the perils of an opening nor underestimate the risks. Let's work inthis mindset."

In related news,authors/directors/producers association ARP, the writers guild SACD and thedirectors organisation SRF joined forces to present Colonna with theirproposals regarding possible changes.

In a joint press release sentout Thursday night, the groups said they were favorable to allowing foreignersto access French subsidies with certain conditions. "Coherence in the matterdemands that we show that our rules are not a form of economic protectionismbut a way of regulating culture."

The organisations said thatdiscriminating against other countries based on nationality - the Americans areat the heart of the issue - was contrary to the principals of culturaldiversity which France so highly regards. It was suggested that the tax creditscheme be opened to non-Europeans as a way to increase local production.