A crop of new UK-based film-makers are emerging at this year's Edinburgh International Film Festival as a string of low-budget pictures earned high praise.

The find of the festival so far is Paul Pawlikowski's Last Resort, a $600,000 (£400,000) made-for-BBC TV film that world premieres at Edinburgh ahead of a Venice slot. Festival-goers agreed that the tale of Russian emigres in the UK established Pawlikowski, who debuted with The Stringer, as an important new talent.

Midway through the event, other low-budget titles earning kudos for their directors included two debuts: Jamie Thraves' 20-something comedy The Low Down, which was financed by FilmFour and British Screen; and May Miles Thomas' black-and-white digital picture One Life Stand.

Billy Elliot, widely expected to become a hit when UIP opens it next month, also marks the feature debut of theatre director Stephen Daldry.

"With Pawlikowski, Thraves and Daldry amongst others you get a sense of a new generation emerging and doing different things," said festival chief Lizzie Francke, who aims for the festival to provide a snapshot of UK cinema.

Box office is expected to be limited for most of the films, although they will no doubt open doors as calling cards. On Billy Elliot, however, UIP co-chief Paul Oneile aims to beat East Is East's outstanding box-office tally.

Oneile expects the story of a miner's son who wants to be a ballet dancer to perform well in "about ten key markets at least", plus the US. Ironically, the film was co-financed by the National Lottery, which has been blamed for many recent UK disappointments.

Elsewhere, UK films at the festival were mostly judged poor to acceptable. Of the more popular, Terence Davies' House Of Mirth found plenty of supporters, while There's Only One Jimmy Grimble was also warmly received.

Upbeat sections of the local press were heralding a modest revival in UK cinema's fortunes - although this may have been just the relief of not sitting through such recent clunkers such as Mad Cows, Honest and Rancid Aluminium.

"It's a matter of timing," said Simon Perry, head of funding body British Screen Finance. "There have been some bad films recently, but a number of interesting ones are coming through."

Including non-festival films, UK cinema looks set for a strong few months commercially. With Aardman Animations' Chicken Run already a hit this year, Guy Ritchie's Snatch and Working Title Films' Captain Corelli's Mandolin and Bridget Jones's Diary are amongst the higher profile pictures in the works.