Leading production house Kang JeGyu Films has just got underway on the largest ever live-action film - and possibly the country's most topical given current global tensions - ever made in Korea.

Tae Guk Gi - which translates literally as "Korean national flag" - is a $11.5m about the Korean war, which ended 50 years ago in 1953. There has not been a major war-themed feature film made in Korea for the last thirty years.

Tae Guk Gi is being directed by company founder Kang, director of Shiri, the 1999 action-thriller that kicked off the four-year boom period for Korean cinema. Featuring Jang Dong Gun, Won Bin and Lee Eun Joo, some of the biggest stars in Korea, and thousands of extras, the film started production on Feb 10th. It will shoot in Korea and Australia and be delivered in widescreen format, for a release close to the lunar New Year in early 2004.

"We may not get Hollywood remake rights, but nobody is going to forget this one in a hurry," said Bill Byung-il Hwang, manager of overseas marketing and distribution at Kang JeGyu.

Hwang is close to finalising a record-breaking Japanese distribution deal and is in advanced talks with a Hollywood studio partner about taking rights in English-language territories.

Shiri was previously handled by Columbia TriStar (through Samuel Goldwyn) in North America. In Japan Shiri was handled by Cinequanon and grossed $20m.

The monster production is likely to draw attention to the two other films on KangJeGyu's slate: teen sex comedy Wet Dreams, which achieved 2.5 million admissions on recent Korean release, and Blue, a naval military drama which recently secured a $700,000 pre-sale to Pony Canyon for Japan.

Meanwhile, UK distributor Metro Tartan has picked up Shiri for release later this year. Although Shiri has been sold to some 22 countries, among the major territories the UK and Italy had remained resistant to foreign-language cinema that is commercially orientated (as opposed to subtitled films aimed at art-house audiences).

The deal was negotiated by Metro Tartan acquisitions head Patrizia Raeli and managing director Laura De Casto and Bill Byung-Il Huang for producer and seller Kang JeGyu Films.

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