Director Jay Russell has already brought two well-loved books to the big screen, in his 2000 family film My Dog Skip and in his 2002 fantasy Tuck Everlasting. But it took a leap forward in special-effects technology for him to pull off The Water Horse: Legend Of The Deep, based on the novel by Babe creator Dick King-Smith.

"This project came to me almost seven years ago," says Russell of Sony's big Christmas Day US release. "One of the reasons it wasn't made at that time was the level and cost of the visual effects. With the vast leaps in technology even just over the last two or three years, I was able to do so much more than I would have been able to do back then."

Produced by Revolution Studios, Walden Media and Beacon Pictures and written by Robert Nelson Jacobs (The Shipping News) - with a polish by Russell and his friend Terry George - the film tells the period story of a young boy who adopts a 'water horse', a magical creature from Scottish myth also known as a kelpie.

The appeal for Russell was in "taking the modern legend of the Loch Ness monster and the ancient legend of the kelpie and blending them with what is ultimately a fable about dealing with loss. There's something for both kids and adults to chew on in this film."

Alex Etel (from BBC period drama Cranford) and Emily Watson lead the human cast, but their co-star is Crusoe the water horse, who over the course of the film grows, thanks to the wonders of CG effects, from a cute baby to a Nessie-like giant.

To bring Crusoe to life, Russell and the production moved to New Zealand to work with Oscar-winning The Lord Of The Rings visual effects supervisor Joe Letteri and the renowned team at Weta Workshop (Rings producer Barrie M Osborne also came on board).

Though the crew filmed for two weeks in Scotland, everything else - including the construction of a 4.2 million litre water tank, the shooting of interiors on Peter Jackson's King Kong stage in Wellington, and post-production - took place in New Zealand.

Russell had some experience of physically challenging shoots, having dealt with fire scenes in his previous film, 2004 action drama Ladder 49. But where high-level effects were concerned, he says: "Weta became my school, and what better school in the world to go to than that."

When the effects brought Crusoe to life "in a way it even exceeded my expectations", the director recalls. He was aware, though, of the dangers of letting effects take precedence over more traditional elements.

"Some of those films that have disappointed audiences are those that have gotten so excited by the technology they forgot they were telling a story," Russell asserts. "For me it was always story, and then we would try to enhance that story with technology."

- Water Horse review, p28.