It is an unseasonably warm mid-October day at Blenheim Palace and under a cloudless blue sky in one of the courtyards of the Oxfordshire stately home, French-Canadian director Jean-Marc Vallee prepares for his next shot. He is in the final week of the 10-week shoot of The Young Victoria, a portrait of the first few years of Queen Victoria's reign, and the set seems to be running with practised efficiency.

Dressed in a green bonnet and a voluminous black skirt, Emily Blunt, as Victoria, arrives, talking on a mobile phone. Playing her husband Prince Albert, Rupert Friend joins her, wearing drainpipe-thin black trousers and a perilously tall top-hat. With Blenheim doubling for Buckingham Palace, the scene calls for Victoria to run down red-carpeted stone steps into an open carriage, followed by Albert. Three rows of soldiers in red tunics, black busbies and sideburns, stand to attention as Victoria passes, following off-camera commands yelled by Alistair Bruce, the production's historical adviser.

The film was originally the idea of a former royal herself, Sarah Ferguson, the former Duchess of York (and credited producer), who brought the project to veteran producer Graham King. The UK-born, US-based producer is best known for his recent collaborations with Martin Scorsese. He saw in The Young Victoria an opportunity to make a return to the UK.

'Because of the dollar against the pound, we looked at filming in Eastern Europe and Germany,' he says, talking about the budget of just over $30m (raised in-house at King's new production outfit GK Films with his business partner Tim Headington). In the end he decided to shoot in the UK, at Blenheim and other historical sites around southern England and the Midlands. 'It's cost us a little more than we wanted to spend because I wanted it to be as authentic as possible,' King says.

Apart from a few small territories, the production has not been pre-sold. Initial Entertainment Group is handling world sales and will meet buyers at the AFM.

'I'm really excited about Jean-Marc's vision, I was excited when Emily came on board, it's a great screenplay, and I feel like if you have those ingredients you're going to make a good film,' King says. 'It's not just the money and the recouping of the budget (we care about in terms of sales); it's got to be the right distribution. All the usual suspects are interested.'

Oscar-winning screenwriter Julian Fellowes joined the project early on after hearing about it from his agent. 'I was very keen,' Fellowes says. 'I met King and Scorsese (who also produces The Young Victoria) in Martin's trailer when they were shooting The Departed, which itself was a very iconic day.' Having been interested for a long time in the life of Queen Victoria, Fellowes adds: 'It's always a great advantage when a subject comes to you that's already in your life.'

'The Queen Victoria everyone knows is the older Widow of Windsor, a rather fat woman in black looking depressed,' the screenwriter says. 'But the extraordinary story at the beginning of her reign is how everyone tries to control her. I was convinced we should begin the film before her succession and her marriage to Albert. That way you can see her struggle with her mother, the Duchess of Kent (played by Miranda Richardson), who tried to devise a role for herself so she could get more control.'

'The business of instant celebrity is also interesting,' Fellowes continues. 'One minute (Victoria) was living under virtual house arrest, the next she was the most famous woman in the world'.

Although it might seem an unlikely jump from his last film C.R.A.Z.Y., a small-scale growing-pains tale about a gay French-Canadian teen, to a relatively lavish British period drama, Jean-Marc Vallee saw in The Young Victoria another adolescent coming-of-age story. 'She's a rebel,' the Montreal resident says of his heroine, relating her independent-minded streak to the rebellious spirit of the rock music that features so heavily on the C.R.A.Z.Y. soundtrack: 'My love and passion for British rock and roll got me here.'

That is evident in his enthusiasm when he explains how he persuaded Icelandic pop band Sigur Ros to score the film. 'I spotted nine tracks from their early albums that are just perfect for the film,' Vallee says.

This contemporary edge applies to the visual style, which promises to be less restrained than what King calls 'your typical BBC-type movie'. Working with Hagen Bogdanski, the German cinematographer of The Lives Of Others, Vallee cites Ridicule and Barry Lyndon as visual influences and talks eloquently about how his changing lighting scheme for Victoria will chart the emotional maturity of his heroine.

Vallee was brought on to the project thanks to King's admiration of C.R.A.Z.Y. 'I was really impressed with it and called Marty (Scorsese) and said this guy's got something,' King recalls. 'If you're a young hot director in Hollywood you get sent everything, and his agent was telling me he had 50 scripts to look at. Jean-Marc took his time and this was the script he fell in love with.

'It all comes down the script,' King adds. 'When Julian Fellowes delivered his first draft I knew we had a movie. Very few times you get a first draft that's as good as his was.'

The flipside of King's praise for Fellowes' work is his frustration with finding good UK screenplays. 'I've looked for many years to do a project here and could never find the right material. I got frustrated why the situation wasn't better when we have some of the best writers and directors. The material seemed to lack something. It's small-mindedness. People who develop movies here think from Carlisle to Bournemouth. I'm a Hollywood guy, but I'm English. We've got amazing talent, so why don't we make bigger, better movies''

Dir: Jean-Marc Vallee
Prods: Graham King Sarah Ferguson Martin Scorsese Tim Headington
Backers: GK Films
Budget: $30m
Screenwriter: Julian Fellowes
Shooting: 10 weeks
Location: UK
Cast: Emily Blunt Rupert Friend Paul Bettany Jim Broadbent Miranda Richardson Mark Strong Thomas Kretschmann Jesper Christensen