Mafilm, Hungary's largest film production company, responsible for many local and international successes such as last year's award-winning Hungarian movie, Jadwiga's Pillow, is fighting the erosion of its dominant hold on the country's filmmaking business.

"A new Hungarian opera-based film, Bank Ban which has a budget of $2.9m (800m Forint) hasn't even knocked on Mafilm's doors - something that would have been unbelievable in the past," says Malfilm production manager Peter Ivanov. "Mafilm must renew itself otherwise all the big productions will take their projects to other, smaller production companies."

Due to producer Andre Szots' relations with several large French production companies, work is still coming in. "We are hosting the ten-week long shoot of a large French TV-film based on the story of the three musketeers being produced by French companies JLA and Hamster" says Ivanov, "as well as a French feature taking place on the campus of a university." However, due to its financial difficulties, Mafilm cannot participate as coproducer in either of these two productions.

But the news is not all bad. With the assistance of the Hungarian government, Mafilm is able to coproduce another French TV-film, Napoleon, that will start shooting in Hungary in September with stars such as Gerard Depardieu, Christian Clavier and Anouk Aimee.

In September an American production, I Spy starring Eddie Murphy, is also likely to start shooting on the Mafilm premises The contract is expected to be signed in the next couple of weeks.