Family audiences, seen as being under-served by UK films, are being targeted in a new funding initiative launched by National Lottery administrator UK Film Council, the BBC and the Children's Film & Television Foundation.

Aimed at children and families, the £900,000 fund offers £300,000 per year over the next 3 years to support development on live action and animated films. Development executive Grainne Marmion will spearhead the initiative.

Estelle Morris, films minister, said: "When I was a teacher I saw first hand how film can enchant children - sparking their ideas and imagination. But UK film-makers rarely target young audiences. So it is important that we support the creation of films young people want to see, introducing them to the magic of film from an early age."

Due to the strength of US animation, UK films were particularly weak last year among seven- to 14-year-olds, according to figures from CAVIAR. The age-group accounted for only 12.6% of the audience for local films even though the average for films of all nationalities in that age range was 22%.

"Big budget successes such as Chicken Run and Harry Potter have shown that there is an audience for distinctively British family friendly films, and this initiative will help to meet that demand," said Jenny Borgars, head of the Film Council's development fund.

Even without the initiative, prospects for UK family fare are upbeat thanks to a surge of local animation projects. At least four large-scale titles - Valiant, Gnomeo & Juliet, A Magic Roundabout and Aardman Animations' Wallace And Gromit film - are expected to have started production by the end of the year.