Italian state funding for local films has stalled for oversix months, while the government has recently made new and drastic cuts to itsentertainment fund.

Now, a group of top Italian producers, including Rai Cinemaand Fininvest-owned Medusa, have taken a full-page advertisement in a nationalnewspaper asking prime minister Silvio Berlusconi to take immediate action toresolve the crisis.

"We, Italian film producers, denounce the irreversiblecrisis that would hit the entire industry should these unacceptable cuts to theentertainment fund be approved," producers said in an open letterpublished on Friday in top daily La Repubblica.

Top indie producers and distributors, including Fandango,Mikado, Lucky Red and Cattleya, said they had fully supported the government'snew cinema law, which was passed in January - but has still not beenimplemented.

However, producers warned that the new law will be thwartedby a new Euros 18m cut to state funding, which Berlusconi's governmentpresented to Parliament only days ago.

"To halt the positive cinema law in its tracks would beand is a crime," producers said, adding: "Many important films willno longer be produced or distributed, causing incalculable damage to Italianculture and to the market.

"We believe that the Government and Parliament'scontradictory attitude will have catastrophic consequences for all those whomake their living from cinema and those who live for cinema, which is one ofthe most important means of asserting Italian culture in the world."

The Italian government plans to cut its general fund forentertainment (FUS), (which includes film, opera, dance and theatre) by 20% in2004 and by 25% in 2005.

In 2003, the Italian film industry received Euros 93.2m instate funds.

Tilde Corsi, the Italian producer behind Ferzan Ozpetek's Facing Windows, said her currentproduction slate includes three films that were funded by the government underthe old cinema law, including Vincenzo Marra's upcoming Venice title, Vento di Terra.

"As things stand today, I would not be able to makethese three films. We are now producing Ozpetek's next film, Cuore Sacro, which has been financedthrough the market. But right now, all we can do is try to survive," shesaid.