DreamWorks FeatureAnimation, which has arrived in Cannes with a 300 strong entourage fortonight's competition screening of Shrek2, has begun production on Shrek 3- and is already working on Shrek 4.

Studio partner JeffreyKatzenberg told Screen that Shrek 3 is scheduled for release in 2006, withShrek 4 to be decided.

"There are actually fourchapters to our Shrek story, soassuming number two is successful, we can continue on to do all four," he said."Before the first one was finished, we talked about what the whole story of Shrek is and each of the four chaptersanswers questions about the first movie and gives us an insight."

The second film answersquestions about why Princess Fiona was imprisoned in the castle from which sheis freed by Shrek. "Shrek 3 and 4 aregoing to reveal other unanswered questions about Shrek and finally in thefourth chapter, we'll understand how Shrek came to be in that swamp when we methim in the first movie. There is a reason he came to be there, but there'sanother chapter to the story before that."

Katzenberg says that, withDreamWorks opening Shrek 2 on May 19,and Shark Tale on Oct 1, 2004 is thefirst year any studio has released two CG-pictures in the same year. "Let's seeif we can produce two for the next year and we have three for 2006," he said.

DreamWorks' 2005 animatedreleases are Madagascar about zooanimals released back into the wild and with the voices of Ben Stiller andChris Rock and The Wallace And GrommitMovie from Aardman Animations.

2006 will see Over The Hedge about a raccoon and aturtle featuring Jim Carrey and Garry Shandling, Aardman's Flushed Away which is that company's first CG-animated film, and Shrek 3.