In a move that will boost the confidence of the Italian film industry, Sky Italia CEO Tom Mockridge has announced that Rupert Murdoch's new Italian pay-tv platform will invest Euros 50m each year into the Italian film industry.

"Sky believes that Italian cinema is a key element of its programming and knows that there is strong demand for it from its subscribers," Mockridge said.

"Sky will back features as well as short films and documentaries," he added.

At the same time, Mockridge said that the pay-tv outfit will make sure it also invests in films that receive government subsidies under the special funding scheme for pictures deemed of "national cultural interest."

Sky's announcement that it will invest in Italian cinema was met with relief by the local film industry. While Telepiu, which merged with Stream to form Sky Italia, invested around Euros 45m each year in Italian film, the financially beleaguered pay-tv platform virtually stopped all acquisitions two years ago.

"It's great that foreigners are investing in Italian cinema," said veteran director Gillo Pontecorvo (The Battle of Algiers), adding: "Unfortunately Italy doesn't know how to promote itself."

National daily La Repubblica quoted Maurizio Scaparro, head of the Theatre des Italiens, as saying: "I am convinced that Sky's investment in the Italian film industry is a good thing for the country and will help spread Italian culture."

Sky Italia will also set up a special arm, named Sky Lab, to promote new talent, and will establish a prize for the best short film and the best screenplay.