"The French film industry is healthy if Canal Plus is healthy," said Canal Plus chief Pierre Lescure yesterday in response to charges that Vivendi Universal is becoming American dominated. "Its health will be better through the acquisition of USA Networks."

His remarks came during a hastily organised Paris press conference, put on to stem a tide of bad publicity that had been rising ever since Vivendi Universal announced its twin deals to buy USA Networks and invest in US satellite group Echostar. At a press meeting held in New York earlier in the week to present the deals Vivendi Universal chairman and chief executive Jean-Marie Messier declared the cultural exception to be dead.

In an interview with French daily Liberation, Messier himself also hit back. He described as "groundless" some of the sell-out accusations of that had been made in the previous two days. And he insisted that what he said in New York was fully in line with current French and European Union policy on culture and trade. "The cultural exception in its Franco-French version is dead, long live diversity."

Both Lescure and Messier committed themselves to honouring the current system of quotas, which sees Vivendi Universal's pay-TV operation Canal Plus inject over FF1bn a year into French cinema, until the end of its licence period in 2004. "We will have plenty of time to discuss them," said Lescure. The first objective, already announced a few months ago, will be the re-negotiation of US deals, both in France and on a European level, with in the context of the World Trade Organisation.

Commenting on Barry Diller's appointment as head of the new Vivendi Universal Entertainment (VUE) unit, which is also perceived in France as a threat to Lescure position and thus as a threat to the group's French identity, Lescure countered that his role will not essentially change. "I have never run the US operations'.I have spent ten days per month in Los Angeles, this is not the way you run a company --- I worked on building bridges between the US and European sides, and I think I succeeded, at least partly'I will still spend 10 days a month in Los Angeles." He added: "Being at the head of the Canal Plus group is already a fulltime job. As VUE CEO, Barry will run the US television and film activities, reporting directly to Jean-Marie Messier."

Messier said: "To accuse me or Vivendi Universal of wanting to standardise culture is scandalous and hypocritical." But he asked that the burden of investing in French cinema be better shared out with other broadcasters.

He also said that Vivendi Universal takes a different position to the Motion Picture Association, of which it is part, concerning the abolition of French state-organised film investment. "We are not aligned and do not expect to be." He insisted that VUE will only operate in the US and said that one of the first initiatives to flow from the distribution deal with Echostar will be to create a European film channel.

And on Lescure, Messier described him as "Monsieur Europe". "In the last year he has greatly contributed to the fact that a number of French and European were distributed by Vivendi Universal and its allies in the US."