In a move widely supported by the local film industry, the Norwegian culture ministry has decided to close state-owned production company Norsk Film and replace it with a new financing body The Norwegian Film Fund (NFF).

Norsk Film has suffered a string of box office and critical disappointments over the last five years, although its latest production, Hans Peter Molland's Aberdeen, is a moderate success after one week on release, earning $71,842 from 22 screens.

The NFF, unveiled by culture minister Ellen Horn, will incorporate funds currently available to the Norwegian Film Institute (NFI), the Audio Visual Fund (AV-Fund) and Norsk Film. It will have an annual budget of $21m compared to the $14m currently available across all of Norway's film funds.

The AV-Fund will be closed down and staff transfered to the NFF. The NFI will continue to exist but focus only on educational activities such as Norway's film museum. Norsk Film will be shut down on July 1, 2001.

The Norwegian government has been reviewing the country's film financing system for the past two years. Horn, who took up her post in March, delayed policy decisions from May 2000 to October to take into account recommendations from various sections of the film industry.

Meanwhile Norway's major private television channel TV2 received a slap on the wrist from Horn who announced that its licence will be put out for tender when it expires on December 31, 2002. The decision follows a long-term row between the culture ministry and TV2 concerning breech of Norwegian advertising rules.