Imax Corporation has abandoned plans to produce a 3-D version of DreamWorks' animated feature Shrek. Co-CEO Brad Wechler made the revelation during an analysts briefing following the release of its third quarter financials, saying increasing production costs of the conventional film has rendered "diseconomic" Imax's proposal to adapt the film for its 3-D projection system.

The 3-D Shrek was touted as the one bright spot on Imax's near future; however Wechler suggested the company was looking into a deal similar to one it struck with Walt Disney Co for Fantasia 2000 that could see a studio title on Imax screens by 2002. He declined to name the film.

Under the terms of the original Shrek deal, DreamWorks would release the conventional version of the film in May of 2001 with the Imax version following in December for a day-and-date release with the video and DVD versions of the film. Imax was to shoulder the entire cost of the adaptation.

Meanwhile, the company's third quarter results offered more bad news thanks to the ailing North American exhibition market: the company posted a loss of $1.2m, worse than predicted by analysts. The fourth-quarter may see a write-down as high as $18m due to its exposure to troubled exhibitors.