Some members of the Italianfilm industry have taken legal action against the Italian government afterwaiting for over a year for public funds that had been awarded to theirprojects.

Producers of 20 emergingwriters and directors who won a public competition at the end of 2003, have nowtaken legal action to freeze the funds of the Italian cultural ministry untiltheir situation is resolved.

Last week, the culturalministry announced that there were insufficient funds to finance the 20features. The government invited filmmakers to reapply for funding this year.

"The money that was setaside to produce these films has disappeared and its disappearance has neverbeen accounted for," says Fabiomassimo Lozzi, a first-time director whofounded 16/12, the group of 20 filmmakers who have brought the legal action.

A first hearing took placeon December 15 and a second one is scheduled for January 12. The government'srepresentatives did not show up for the first hearing.

Meanwhile, around 40established directors are currently also still awaiting government funds whichhad been awarded in 2003, for a total of Euros 92m.

The crisis that has hit theItalian film sector is currently so bad that Italian film production isexpected to drop by 70% in 2005, with Italy producing only 28 films, down fromthe 95 pictures that were made in 2003.

In response to the crisis,national unions of writers, directors, producers and technicians have formed a"committee of permanent protest" and are lobbying the government toradically and urgently change its policies.

"No other industry inItaly has seen its budget slashed so crudely and savagely," the committeesaid in a statement. "The Italian film industry is fighting for itssurvival and to defeat the political forces which are attempting to destroyus."

Many Italian filmmakers havealso been protesting against the country's new film law, describing it as a"cultural genocide."

Under the new rules, thegovernment committee has introduced a "reference system", whereby itassesses a producer's track record over the previous five years before itgreenlights a film.

"The new law will onlybenefit the biggest film producers in Italy - state controlled RAI-Cinema andprivate, Berlusconi-owned Medusa," saysLozzi, whose collective, lead by veteran directors Mario Monicelli andEttore Scola, recently staged a noisy protest in front of the ItalianParliament.

Meanwhile, local producershave created an association to protect and assert the rights of independentItalian filmmakers, which spans legal matters to lobbying and exploring newways of funding film projects without government money.

The aim of the group, called"Coordinamento Italiano Audiovisivi e Cinema (CIAC) is "to pushindependent film-making onto a level more akin to that of other Europeancountries," Lozzi said.