A new Italian law, which the government hopes will revolutionise the public funding of local film, has met with a lukewarm reception from regional filmmakers.

The legislation, unveiled by cultural affairs minister Giuliano at the weekend, proposes to limit the public funding of local films in a bid to ensure more quality films get made.

Under the new rules public funding subsidies will be cut from 75% to 50% of the budget. Producers meanwhile will have to satisfy a government funding committee that they have already found private backing for the remaining 50% of the budget, before a film is green lit for state funding.

As a further guarantee of a project's commercial viability, the Italian government is also establishing a "reference system", whereby the funding committee will assess a producer's track record over the previous five years before it agrees to back a film.

And, for the first time ever, publicly-funded projects will also be allowed to receive financing through product-placement.

The government hopes the moves will go some way to counter current criticism that it only supports films that flop at the box office, as it will only fund films that private backers think they can recoup costs on.

However, the new law, which will become operational in January, has received a lukewarm response from some members of the local industry.

Producer Aurelio De Laurentiis denounced the fact that the government is still only willing to fund projects that are shot in Italian.

"It's a medieval law - something that can only come from embalmed people who don't know anything about the Internet and don't understand that in order to be competitive, cinema must be able to target a globalised world," De Laurentiis said.

Others said the law would "only help the usual crowd," and would not help support young directors.

"It runs the risk of harming small independent producers while helping those that are able to guarantee commercial solidity and fast earnings at the box office," Marco Mueller of Downtown Pictures told national newspaper La Repubblica.

But Mr Urbani said the legislation would help boost Italian cinema's global appeal in addition to favouring first and second features.

"Nowadays, nobody argues anymore about cinema being art, but can it not also go back to being one of the main economic resources of Italy and Europe'" he said.

But he stressed that artistic qualities would have a large bearing on the government's overall assessment of projects.

Meanwhile, the government has still not approved a tax shelter system, despite declaring in Venice two years ago that it was "imminent."

In the past, and particularly in the 1970s, several attempts were made to introduce tax shelters in Italy, but Italian governments have always eventually objected to such legislation being seen through.

Urbani did say that a separate decree for a tax shelter would be forthcoming. "(Treasury minister) Giulio Tremonti was sceptical, but he is coming round to the idea," Mr Urbani said.