At the grand old age of 62, the Edinburgh International Film Festival (Eiff), the world's longest continually running film festival, is having a makeover. Edinburgh has shifted its dates from its traditional August slot to June (18-29). The event has also received an injection of $3.7m (£1.88m) in public funding from the UK Film Council (Ukfc) over the next three years.

'The date change will allow Edinburgh to stand alone and not get lost in the other festivals, which is enormously to its benefit,' says Ukfc chairman Stewart Till. 'It's a really smart move.'

Edinburgh, alongside the London Film Festival (LFF), is benefiting from the Ukfc's Film Festival Fund which has $2.5m (£1.25m) to invest annually for three years in up to two festivals of national and international significance.

The UKFC is understood to have agreed with the British Film Institute (BFI), which runs the LFF, that the money earmarked for London should be ring-fenced until 2009.

This year's Edinburgh festival will open with the world premiere of John Maybury's The Edge Of Love, a rollicking and turbulent drama set around Welsh poet Dylan Thomas' love life, starring Keira Knightley and Sienna Miller.

There are 15 world premieres and more than 140 feature-length films. Film-makers ranging from Errol Morris to Shane Meadows and veteran special-effects supremo Ray Harryhausen will all be in attendance. Fresh from Cannes, there will be screenings of Terence Davies' Of Time And The City and Duane Hopkins' Better Things, while a slew of Berlin titles will be showcased including Jose Padilha's Elite Squad, Brad Anderson's Transsiberian and Isabel Coixet's Elegy.

The festival is staging a major retrospective of the work of US independent film-maker Shirley Clarke. It is also hosting a family gala screening of WALL.E, the latest offering from Pixar, about the last robot left on earth.

A boon for independent producers

'Edinburgh is much better at this time of year. I'm sure any independent producer will say that,' says Sarah Radclyffe, the UK producer of The Edge Of Love.

'The problem all independent producers have nowadays is that we have to use bank money to fill the gap... when you're using bank money, the longer it is out, the more it costs. Because of the end of the tax year (in April) and the basic UK weather, we all end up filming in the summer as much as we possibly can and finish our film in January, February, March time.

Then, there is only Cannes. To wait for the autumn festivals is too long. The money is costing on a daily basis.'

Her inference is clear: for certain UK producers, a slot in Edinburgh in June is a viable alternative to Cannes. Radclyffe adds that Edinburgh has always been a lucky festival for her - in 1985 she came with Stephen Frears' My Beautiful Laundrette, which went on to become a huge international hit.

Edinburgh, which has a budget of $3.8m (£1.9m) this year, is being marketed as 'a festival of discovery' - Till uses the phrase 'the Sundance of Europe'.

World premieres will include Charles Martin Smith's local-themed Stone Of Destiny, Kenny Glenaan's Summer, Christine Molloy and Joe Lawlor's Helen and Matthew Thompson's Dummy, which are all in contention for the Michael Powell Award for best British film and its boosted cash prize.

The organisers distance themselves from the Sundance comparison. 'It's easy to use that colloquially with the public because they sort of understand Sundance is about independent film, but within the industry we're a bit wary of using that (Sundance comparison) because Sundance has changed so much,' says Ginnie Atkinson, managing director of the EIFF.

It is clear the UKFC sees Edinburgh and the LFF as complementary events. Till says the presentation given by Edinburgh to the UKFC offered 'a very impressive vision we were happy to support financially'.

London to seek bigger profile

Further south, the LFF is likely to be reshaped as a glittering event more in the mould of Cannes or Venice: a 'bigger, louder' festival that, says Till, has 'more wattage, more star power and more impact on the world stage'. Greg Dyke, recently appointed chairman of the BFI, has called for a 'bigger and glitzier festival'.

London will continue to show a diverse range of world cinema to London audiences but may also begin to stage what Till calls 'big headline-grabbing events'.

This will obviously require a major boost in funding. The LFF runs on a budget of around $6.9m (£3.5m) - almost 70% of this comes from box-office income and sponsorship. When the LFF applied to theUKFC for extra funding, proposing a new budget of around $10.9m (£5.5m), the festival was reportedly told its plans were not ambitious enough.

'Some of the comments about glitz have been a bit misleading because I think what we're all talking about is the profile of the festival and the extent to which it permeates the city and the reach it has,' notes the LFF's artistic director, Sandra Hebron.

'We don't have a lot more capacity. We don't have many more tickets to sell but we all feel there is more that could be done in terms of the level of impact we have and the level of the awareness.'

The challenge for London is how to maintain its reputation as a public 'festival of festivals', an element of which is showcasing new work (some without UK distribution or even sales agents attached), while also becoming the higher-profile event the UKFC is advocating.

Till is confident extra money for London can be raised. 'If we got to the public and private sector and offer them a festival that could have the impact for London and the British film industry that Venice does for the (city of) Venice and Italian film industry and Berlin does for Berlin and the German film industry, I'm hopeful we will be able to raise funding.'

Meanwhile, the idea is that Edinburgh will be the place to unearth new talent and where distributors can find neglected gems. Till envisions it becoming a place for 'finding new film-makers and setting them up... I hope it will accelerate certain film-makers in their careers and certain films will get a following because of their screening in Edinburgh.'

While it should give a lift to UK film-makers in particular, Till argues Edinburgh 'won't be and shouldn't be exclusively a British festival'.

'The old Edinburgh was charming and glorious in its own way but it was hard to define,' Till suggests. The organisers themselves concede Edinburgh was 'static'.

The hope now is Edinburgh will seem fresher and more dynamic. Atkinson pinpoints the four key elements of the festival in its new June guise: curation, the nurturing of new talent, enlightenment ('ideas, exchange, debate') and contact - the festival as a networking hub for film-makers, professionals and audiences alike.

Edinburgh refines its offering

By shifting to June, Edinburgh has distanced itself from London, thereby lessening the sometimes ferocious competition that existed between the two events in previous years.

'People weren't just going, 'Well, there are two British festivals close together, choose either or.'

They were actually making decisions based on timing and whether they wanted an early summer premiere or an autumn-to-winter premiere,' says Edinburgh's artistic director Hannah McGill. 'We have talent with the bulk of the films. We prioritise bringing film-makers rather than blowing the bulk of our budget on two days with an A-list star.'

Edinburgh has long enjoyed a reputation as a cinephile's delight. The festival staged a Martin Scorsese retrospective as early as the mid-1970s, showcased New German Cinema and helped bring directors such as Nagisa Oshima and Sam Fuller to the attention of UK audiences. However, its importance as a place to do business has always been harder to quantify, especially in recent years.

Its previous August dates - slap-bang in the summer holidays and just before Venice and Toronto - meant it was never prominent on the international industry's radar.

The organisers are not claiming this will change overnight. 'This is a long-term plan. We don't expect to have massively different results this year,' says Atkinson. 'This year is benchmarking.'

She adds that the extra Ukfc funding has made it easier for the festival to invite talent from across the programme, 'rather than to pick and choose, as we have had to in more cash-strapped years'.

New industry delegates at EIFF

The signs are that Edinburgh is attracting a range of industry delegates who might not have attended an August festival. Buyers who will be attending for the first time include Pretty Pictures, Swift, TF1 (all from France) and TVE and Aquelarre Servicios Cinematograficos from Spain.

Meanwhile, there will also be an increased attendance from Scandinavia (primarily because Eiff no longer clashes with the Norwegian International Film Festival in Haugesund). Various US buyers are also expected, among them IFC Films and Magnolia Pictures.

Major independent sales agents including Celluloid Dreams, Cinetic Media and The Match Factory are also expected. 'Americans as well as Europeans (sales agents) have been much more keen to give us films they are still working on,' says McGill.

Certain high-profile screenings, for example Steven Sebring's Patti Smith: Dream Of Life (sold by Celluloid) are yet to close UK deals. Buyers will be watching carefully to see how they play with a local audience in Edinburgh.

Eiff industry services head Mary Davies suggests that whether or not sales are closed during Edinburgh, buyers use the festival to identify movies they might acquire later in the year. This happened with Gavin Hood's Oscar-winning Tsotsi, which Dutch buyer Moonlight bought in Toronto after seeing first in Edinburgh.

Certain buyers will be going straight from Edinburgh to the London UK Film Focus, which runs from June 30 to July 1. To accommodate these distributors, the festival will hold a repeat programme of films that have screened earlier in the festival.

The public also appears to have welcomed the change of dates. Advance ticket sales are brisk. The hope is that for two weeks in June, Edinburgh will be a film festival city, not a place where films are competing with plays, concerts and comedy events for the attention of public and press.