AdrianaChiesa has stepped down from her position as CEO of Italian promotional body,Aip-Filmitalia.

Chiesa'sresignation comes just ahead of the Academy Awards next month, which seesItaly's candidate Don't Tell shortlisted in the best foreign film category. Itis the first time an Italian film has made it to the last five since Life IsBeautiful won the Oscar in 1999.

Nevertheless,Chiesa's move comes on the heels of mounting resentment from the Italianindustry over state-funded Filmitalia's lack of funds.

"Ifelt it was inevitable, ethical and rigorously professional to act in this waygiven that it is impossible to carry out Filmitalia's mission," Chiesasaid of her sudden resignation.

"Thecompany has been deprived of the financial resources it needs for itspromotional activities, both to assert the cultural position of Italian cinemain the world, and to create the economic conditions that are necessary for itsinternational distribution," she said in a statement.

Chiesa,who was appointed last May, said that for 2006 Filmitalia has only receivedsufficient funds to maintain its staff and for general expenses for the year.

She said the organisation has not received any government funds at all tofinance its promotional activities.

"WhenI was appointed, I received the support of the entire Italian film industry,and that it precisely why I feel that it is right for me to resign. In doingso, I hope to underline the serious situation that Italian cinema finds itselfin, a situation that is currently affecting Italian culture on the whole,"she added.

SilvioBerlusconi's government has been widely criticised for drastically cuttingfunds to the entertainment industry.

WhenFilmitalia was created in 2003 it aspired to have a similar role to France's UniFrance. But some industry insiders complainthat the Italian organisation has as little as a tenth of its Frenchcounterpart's funds.

GiovanniGaloppi is expected to continue in his role as president of Filmitalia. Chiesais expected to reprise her active role as head of her Rome-based internationaldistribution company, Adriana Chiesa Enterprises.