An angry war of words has broken out among Belgium's regional and national governments over the thorny issue of funding policies for the audio-visual industry.

The Walloon regional government unveiled plans this week to allocate an extra BEF400m (euro10m) each year to support the development of a local audio-visual industry.

The cash will go to Walloon's regional investment company (SRIW) which is to set up an independent audio-visual division that should be up and running before this year's Cannes International Film Festival. The division will span four high-priority sectors: film, animation, comic strips and technology.

Economic affairs minister Serge Kubla said: "We want to keep the audio-visual sector alive, and in the Walloon region."

But Flemish government economic affairs minister Dirk Van Mechelen has said the government is in favour of scaling down efforts to support local film production.

Last year, the government injected just over euro8m into film production. Van Mechelen considers this "way too much and unmaintainable in the future", and in breach of the European Commission government subsidies directive.

The minister believes it should be up to state-owned broadcaster VRT to take over a substantial part of the government's funding role.

Meanwhile Flanders Image would also become involved in the promotion of Flemish films at home instead of just at markets and festivals abroad. The announcement has prompted Flemish director Stijn Coninx to quit as Flemish Film Institute (FFI) chairman claiming all FFI efforts to help the political world with the development of a serious audio-visual policy has been a waste of time.