Former Locarno festival boss, Marco Mueller has signed a ground-breaking deal between a new outfit heis launching, Downtown Pictures, and Rome's Rai Cinema.

The deal, which was announced by Mueller, Rai Cinema CEO Giancarlo Leone and president GiulianoMontaldo, is a 2-year first look, non-exclusive production agreement which willsee the Rome mini-major invest in Italian and European pictures as well aspictures produced in other parts of the world, particularly focusing on newdirectors and territories.

The first two projects to be produced under Downtown's agreement withRai Cinema are Mud, Turkish-Cypriot director Darvish Zaim's movie aboutthe contradictions surrounding the forced cohabitation between Greeks andTurks; and Italian documentary director Gianfranco Rosi's English-language filmOakland Is For Burning, an on-the-road critical look at American excess.

"Downtown will be a small producer of very unusual, small films," saidMueller, explaining that the deal with Rai Cinema will focus on films with a"tighter cultural and market value." Mueller said he hopes Downtown, which isbased in the Northern Italian town of Bologna, will produce 5 feature films anddocumentaries each year with an average budget of $1.5m.

"The deal with Rai Cinema will offer me both the freedom and financialsolidity I need," Mueller told Screendaily, adding that he is currentlyconsidering several UK and European films.

Other films on Downtown"s debut slate are Downtown '1 directorEdo Bertoglio's Dated (Scaduti) which is planned as anItalian-Swiss-US co-production, Giuseppe Mornadi's debut feature, Il ColoreDella Bassa, and Gianfranco Pannone's Italian music documentary Sonaso'/i>.

While he will leave his position at Benetton's Fabrica Cinema where heproduced films including SamiraMakhmalbaf's Blackboards and Babak Payami's Secret Ballot, Mueller iscurrently also busy helping to create a new film fund.

Based in Bologna, the film fund which is provisionally named South bySouth East will be operational in November and will be set up by Cineteca, ITC,Fabrica, Downtown, and a Swiss investor.