A new joint venture between UK production outfit Matador Pictures and Regent Capital is to provide up to 30% of the budgets on a series of films qualifying for the new British tax break.

The initiative - called Cinema One - will be focused on backing four to five films with commercial prospects in the $1.8-3.5m (£1-2m) range next year.

Cinema One will cashflow the tax credit, which comes into force on January 1.

Matador founders Nigel Thomas and Lauri Apelian will act as directors. Matador co-financed and executive produced Ken Loach's 2006 Palme D'Or winner The Wind That Shakes The Barley.

The first film from the venture will be action-horror movie Outpost, which will begin shooting in Scotland in January.

The film, written by Rae Brunton and directed by Steve Barker , is set in an unnamed Eastern European country, where battle-worn mercenaries are hired by a mysterious businessmen for his own special mission.

Cinema One will be among the first new ventures to take on the new UK tax break, which has only recently been approved after months of delay.

The subsidy was radically restructured last month by the European Commission, shifting the emphasis to a new cultural test.

Thomas told ScreenDaily that the new rules had "narrowed the range" of the films that could be backed, ruling out some co-productions.

He believes however that there is enough untapped UK talent to make the venture exciting but the emphasis would be on films that make money.

"Some producers are embarrassed by this dirty thing called money but this is about commercial realism."

Thomas says some of the films will be genre titles with established audiences but he was interested in "films with rollicking good stories. The genre I am interested in is good film."

Although the partners are taking their first punt on the new tax regime, eight-year-old Matador had worked with the former sale-and-leaseback system, co-financing Loach's 2004 film Ae Fond Kiss.

Recent credits include the Sundance and Edinburgh-selected thriller Cargo and teen horror Voodoo Lagoon.

Regent Capital is a London-based finance house with a history of managing a portfolio of films with commercial potential for small groups of investors in film.

The company has worked with Matador on many recent projects including The Wind That Shakes The Barley.