A potentially serious rift is building at the heart of Eurimages, the Council of Europe fund for the co-production, distribution and exhibition of European cinematographic works.

It has emerged that both Holland and Italy are threatening to withdraw from the fund, which currently has 33 members.

'They are unhappy with the way things are going and they are considering withdrawal,' a well-placed Dutch source has confirmed.

Other members are understood to be concerned that if Italy and Holland abandon Eurimages, their own annual contributions may increase drastically.

There must also be the fear that if two countries leave the fold, others may follow.

The root cause of the dissent is that certain members feel the contribution system is unfair as they put more into the fund than they get out.

Roberto Olla, Executive Director of Eurimages, confirmed that the Dutch and Italians had complained but insisted that the situation was not as 'dramatic' as is being suggested.

Olla pointed out that Eurimages has already set up a working group to look at alternative ways that members' contributions might be calculated. This group has had three meetings, two before Christmas and one last week. Olla also cautioned that members who withdraw from the fund would risk isolating themselves.

There will be a meeting in March of the board of management at which the Dutch and Italian complaints are bound to be discussed again.

If Holland and Italy were to leave Eurimages, it wouldn't necessarily mean that other members' contributions would be hiked up. An alternative would be to reduce the overall budget of the Fund.

The UK withdrew from Eurimages over a decade ago. Since then, the prospect of Britain rejoining the fund has been floated from time to time but a UK Film Council spokesperson has confirmed there are no immediate plans for this to happen.

The majority (almost 90%) of the Fund's resources - which originate from member States' contributions - goes to supporting co-production. Since it was set up in 1989, Eurimages has supported the co-production of more than 1200 full-length feature films and documentaries.