After years of feasibility studies and grand designs, Scottish Enterprise has concluded that there is insufficient demand within the Scottish film industry to justify the construction of a large-scale film studio.

Instead, the organisation intends to commit $1.6m (£1m) of public funding to a more modest $4.7m (£3m) studio facility proposal aimed primarily at the needs of television and commercials production.

Demand for a Scottish studio grew in the wake of Braveheart (1995) and Trainspotting (1996) and gathered momentum with the news that Sean Connery and Sony were considering collaborating on a combination of studio and production slate that would make such a venture viable.

The Connery project never materialised and it has become increasingly evident that Scotland lacks the continuity and scale of production to justify massive public expenditure on a potential white elephant.

However, any sense of disappointment over the decision has been off-set by the announcement that Malcolm Ritchie of Kuhn & Co is to return to his native Scotland with plans to raise a $7.8m (£5m) development fund to finance and produce up to ten low-budget features. The features would be budgeted at under a $1.6m (£1m) each and be filmed digitally. Ritchie was formerly chief operating officer of Polygram.

Scottish films have been enjoying a high profile this year led by Peter Mullan's Golden Lion winner The Magdalene Sisters as well as the critically acclaimed Sweet Sixteen and Morvern Callar.

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