Is the Belgian tax shelter in danger' This week, the EU sent back proposals for the renewal of the shelter, the fiscal incentive that has provided a major boost to the local industry as well as supporting international production.

It is understood that the EU had reservations about the lack of 'cultural' documentation in the renewal proposal.

Producers in Cannes have expressed their alarm at the idea the tax shelter scheme (due for renewal at the end of June) may now be in jeopardy.

'Without it, we no longer have an industry,' commented Genevieve Lemal of Scope Invest, one of the market leaders in finding tax-sheltered finance in Belgium.

In recent years, Scope has backed many films that have screened in official selection in Cannes, among them Indigenes and the Dardennes' The Child. It recently invested Euros 5m in Jaco Van Dormael's Mister Nobody (being sold in the market by Wild Bunch.) 'I find it very surprising,' Lemal said of the news that the EU hasn't yet ratified the tax shelter renewal.

'It's no reason for panic. It is a technical thing,' insisted Peter Bouckaert, Chairman of the Flanders Producers' Association. 'The EU have asked for additional information regarding the cultural aspect.'

The Belgian Minister of Finance Didier Reynders is expected in Cannes on Monday for a 'Belgian tax shelter day.' By then, it is hoped that the questions regarding the long-term viability of the shelter may have been answered. As Bouckaert puts it: 'You can never be sure but it would be an enormous surprise if it didn't get through.'