The BBC has announced a substantial increase inits intended film production and acquisition budget.

All of the proposed investments are subject tothe favourable settlement of the current licence fee negotiations but the broadcaster says its new plans could mean an investment of $522m (£300m) to British film over its next 10-year charter period.

If approved, the investments would mean:

* Starting in April 2007, an increase in the BBC's film production budget from the current $17m (£10m) a year to $26m (£15m)

* Subject to a review in 2008, a further budget rise to $35m (£20m) per year.

* A guaranteed extra $8.7m (£5m) per year, or $87m (£50m) between 2007 and 2017 for acquisition of British films for BBC channels - the first timeit has guaranteed a spend for film acquisitions.

* Additional growth in the acquisition budget, potentially reaching $17m (£10m) per year.

Whilethe industry can certainly benefit from increased production funding, theraising of the BBC's acquisition budget (currently about £6m per year on allfilms going up to £11m per year) is especially encouraging for Britishfilm-makers who now have more likelihood of selling their film to television.

TheBBC also noted that it planned to acquire British films for its flagshipchannels BBC1 and BBC2, not just for its smaller channels.

Whilethe amount of money is small in comparison to a Hollywood blockbuster's budget(or the license fee that currently generates nearly £3bn per year for theentire BBC), BBC Creative Director Alan Yentob hopesthat the BBC's new commitment to film spending will spur other investment inthe UK film industry.

"For every pound that we invest, that brings in otherplayers and other partners," Yentob said.

Filmssupported by this BBC strategy will be defined as British based on theDepartment of Media, Culture and Sport's new Cultural Test for British Film.

Theincreased funding won't start until 2007 so the BBC said it is now adding £500,000to its development funding to ensure the right kinds of projects are in thepipeline for production.

Inaddition to the BBC's new internal strategy for film, it announced a newpartnership with the UK Film Council to supportBritish film. The partnership with the UKFC includes collaboration on theDigital Screen Network, Skillset, the BFI, medialiteracy projects, and other activities.

Thepartnership's two main aims will be to build enthusiasm and awareness for filmamong UK communities andindividuals, and to maximize the film industry's economic and cultural growth.The partnership will be ongoing and to be reviewed on a biennial basis.

"Thisis a significant step up in the investment by the BBC of money into the Britishfilm industry," said UKFC CEO John Woodward of the partnership and the BBC'snew investment strategy.

Woodward notedthat a potential $52.2m (£30m) per year could make a big difference in terms ofindigenous UK films. The UK FilmCouncil had been lobbying the BBC to devote more fundingtowards British film and the parties said they had been working out details ofthe partnership during the past six months.

In its submission to the BBC charter review in May2005, the Film Council had suggested that the BBC should work towardscommitting $69.6m (£40m) per year to British film development, production, andacquisition.

Yentob noted that the strategy announced today was justthe starting point but "none of us has any objections to growing that budget'We'llbe practical about growing that pot," he said.

Tim Willis, director of filmat producers group Pact, said the announcement was a positive step.

"Pact hasrepeatedly said the BBC is in a unique position to invest in and develop thewealth of talent in the British film industry and to contribute much neededventure capital to the film production sector," Willis said.

"We believe the UKFilm Council has done a good job in persuading the BBC to take this step. Thetarget level of investment, coupled with the new tax credit, should contributemeaningfully to greater sustainability in the production of British films."

TheBBC heads also spoke of the timeliness of the announcement due to the convergenceof TV, film, and new digital technologies, as well as the increasing overlap inUK talent working in bothfilm and TV.

"It's a fluid industry and the film and TV world will be closerand closer in the future," said Jana Bennett, director of television for BBC. "We wanted to come outwith a TV film policy not just a production investment policy."

She noted thatthe strategy will include a specific film outlook for each BBC channel, such as BBC Three's concentration onnew talent, and revealed that BBC2 was planning a largeseason of British film (both classic and contemporary) in 2007.

DavidThompson, head of BBC Films, said that theamount invested in each film would be variable, although the BBC would be unlikely tofully fund most projects. "We still need to be cautious, it's too risky for usto sink $34.8m (£20m) into one film," he said. "We still want to work withpartners, that's part of the idea is that we will inspire spending from othersources as well."

Thompsonsaid BBC Films future plans would move away from stereotypically BBC stuffydramas into "a bit more comedy and more lighter fare."They also plan to work on some larger-budget projects, such as Edge of Darkness, a thriller based onthe 1985 miniseries, being developed with director Martin Campbell that willlikely shoot in 2007.

Headded that BBC would look for projects "not based on the scale of the budget, butthe scale of ambitions."

BBC Films haspreviously worked on projects including MrsHenderson Presents, Bullet Boy, A Cock & Bull Story, Match Point, BillyElliot, and Mrs Brown.

BBC competitor Channel 4 currently spends $17.4m (£10m) (a proportionately largerportion of its budget) on film financing and production, and there is said tobe a likely boost in Channel 4's film budget to come.

Channel 4 said it had nocomment about the likelihood of an increased film budget at this point.