UK director Ken Loach and producer Rebecca O'Brien, whose Sweet Sixteen was confirmed for Cannes competition on Wednesday, are splitting from long-standing UK film co-operative Parallax Pictures to launch a new production company, Sixteen Films.

Parallax Pictures is being dissolved next month, ending a partnership that has been prominent in UK and continental European film production for more than a decade. Parallax's Sally Hibbin will be based at a new company, Parallax Independent, which will occupy the old offices in Denmark Street, with fellow producer Eddie Dick.

Joining Loach and O'Brien as associate director is Loach's regular writer, Paul Laverty. Henrique Goldman, Ian Knox and Peter Bloore will move their development projects to the Wardour Street-based company.

Parallax Independent's next production will be Blind Flight, the Brian Keenan-John McCarthy story starring Ian Hart and Joe Fiennes and directed by newcomer John Furse. The Denmark Street building will continue to provide houseroom for other producers and directors.