It is a cold, bright morning in a tiny village two hours outside Beijing, and Hong Kong star Andy Lau, dressed in floor-sweeping Qing Dynasty robes, is ordering around a group of extras.

A veteran of more than 130 films, Lau knows a thing or two about placing extras on their marks. And director Peter Ho-sun Chan, who is standing to one side of the scene in silent contemplation, is only too happy to let him get on with it.

Although there are a few hundred cast and crew milling around, this is one of the smaller scenes being filmed for Chan's $40m war epic The Warlords. A few weeks previously, the production had two units shooting major battle sequences with around 1,500 extras and 600 crew. And when the shoot started last December, the crew had to fight its own battles against extreme cold, snow storms and an unforeseen traffic jam of Shanxi province coal trucks to shoot a scene in which a group of bandits rob the soldiers of Taiping.

Chan's biggest production to date, The Warlords is the second collaboration between the Hong Kong director and US producer Andre Morgan following award-winning musical Perhaps Love. It features a dream cast of three of Chinese cinema's biggest stars - Jet Li, Andy Lau and Takeshi Kaneshiro - in a story based on historical facts from the mid-1800s.

The stars play three bandits who pledge loyalty to one another and rise to become military luminaries in the Qing imperial army's fight against the Taiping Rebellion. Actor-film-maker Xu Jinglei also stars as a woman who becomes involved with two of the sworn "brothers", thus inflaming what has already developed into a bitter power struggle.

The words 'epic' and 'Chinese movie' seem to have become synonymous in recent years, with each new production claiming an ever bigger budget. But this is only to be expected as a string of large-scale costume dramas, most recently Curse Of The Golden Flower and The Banquet, continue to score at the Chinese box office and new local investors rush in. The bulk of The Warlords' hefty budget has been supplied by Morgan & Chan Films, Hong Kong's Media Asia and Beijing-based China Film Group, with the latter bringing in a consortium of smaller mainland investors.

But while the film appears to be following a pattern, Chan is keen to stress two things. Firstly this is not a martial-arts film - although that would undoubtedly be an easier sell overseas - and secondly it is not a remake of Chang Cheh's 1973 classic Blood Brothers, as was widely reported in the Chinese press, although it is based on the same historical events.

Rather than direct yet another highly stylised martial-arts period piece, Chan says he has set out to make a realistic war film with romantic elements.

"Of course it's difficult for Jet Li to abandon the safety net of wushu, but he was happy to do so because he wants to tackle more dramatic roles," explains Chan. "I think of this as more of a gangster film than a martial-arts epic - something in the tradition of The Godfather or John Woo's A Better Tomorrow - because it's all about brotherhood and loyalty in the most extreme Chinese gangster kind of way."

With this aesthetic in mind, Chan knew he had to show the brutality of war during that period, before modern weaponry, when soldiers hacked away at each other with axes, swords and spears. For the battle sequences, he used a combination of static and handheld cameras and had two units shooting simultaneously. Action choreographer Tony Ching Siu-tung shot the big scenes with thousands of extras, while Chan went in behind him to film close-up shots.

"Chinese war films are usually beautifully orchestrated but they don't represent the period in a very real context," says Chan. "We needed this to feel real and reality comes from the details. We wanted to see the spear sinking in and coming out of a soldier's back. Chinese films don't usually do this because details are time-consuming. It's actually easier to shoot a stylised but not very realistic fight scene because, if you don't go for close-ups, it looks great."

Due to its emphasis on credibility over style, the film will employ CGI, for rendering soldiers and scenery, and for gory close-ups of weapons slicing flesh, but Chan says there won't be any wire-fu or gravity-defying stunts. Hong Kong-based effects house Fat Face, which won acclaim for its work on the Pang Brothers' Re-cycle, will handle most of the special effects.

After shooting for two months in and around Beijing, The Warlords moved down to Shanghai and Hengdian World Studios after Chinese New Year in mid-February and wrapped at the end of March. China Film Group and Warner China Film will distribute in mainland China while ARM Distribution, the international sales outfit founded by Chan's Applause Pictures and the Ruddy Morgan Organization, is handling international sales and hopes to show the first footage at Cannes. A pan-Asian release is scheduled for mid-December.

The warlords
Director/writer: Peter Ho-sun Chan
Producers: Peter Ho-sun Chan and Andre Morgan
Executive producers: Han San Ping and Peter Lam
Action choreography: Tony Ching Siu-tung
Director of photography: Arthur Wong
Editor: Wenders Li
Production designer: Yee Chung Man
Jet Li
Andy Lau
Takeshi Kaneshiro
Xu Jinglei
Hong Kong: Morgan & Chan Films, Media Asia Films
China: China Film Group, Warner China Film HG Corp, Beijing Polybona Film Distribution, Chengtian Entertainment, Stellar Megamedia