The Montreal World Film Festival officially has competition. Federal film subsidy agency Telefilm Canada and its provincial counterpart SODEC announced the winning bid to organize a new event in the city.

But Montreal's ongoing film festival war got a little stranger when it was revealed the outcome resulted through a merger of interests between local event organizer Groupe Spectra, which mounts the city's highly regarded jazz festival, and the Montreal Festival of New Cinema, the city's smaller film event backed by software developer Daniel Langlois, the owner of the city's ex-Centris art house multiplex.

Tagged with the unwieldy title of "Regroupement pour un Festival de cinema à Montreal", the joint effort entails a transitional period next year with Groupe Spectra participating in "enhanced" version of the New Cinema festival presented in October 2005 and then the launch of the new and separate event in 2006. At least that's the idea.

During a tele-conference on Friday, Telefilm chairman Charles Belanger was at pains to distance his agency from any discussion of the organizational or planning aspects of the event, except to say the agencies' roughly C$1m in annual funding previously ear-marked for the MWFF will be directed to the new event.

Although no dates have been mentioned for the third event, there is every likelihood the city will have three film festivals in 2006.

MWFF director Serge Losique has vowed the 2005 MWFF will go ahead. The festival's two principal sponsors, Air Canada and Visa Canada have signed on and Greek auteur Theo Angelopolous has agreed to head next year's World Competition jury.

On Dec. 10, lawyers for the MWFF filed suit in Quebec Superior Court against Telefilm Canada in an effort to block the agency from pursuing the creation of a rival event.

One thorny issue for Telefilm will lie in justifying the subsidy of two events involving Langlois, who has signed on as a board member of the new event. The New Cinema festival received C$205,000 from Telefilm in 2004.

In September, Telefilm and its Quebec counterpart SODEC issued the call for proposals following an ultimatum to Losique to make changes to the festival's administration and operation or lose their support.

Losique's long-simmering feud with the agencies boiled over in the summer after the release of a report on film festivals in Canada casting the MWFF and its administration in a decidedly poor light, a report dismissed by Losique as biased and unsupported by fact.

Meanwhile, incoming Telefilm executive director Wayne Clarkson, who doesn't take office until January, is staying clear of the fray -- a necessary tactic given his close association with the MWFF's biggest rival, the Toronto International Film Festival. Still, with so many details to be resolved and the MWFF lawsuit to defend against, it will soon be hard to avoid.