Spain'snew Socialist government has increased funding for Spanish cinema by 89%,fulfilling its election promises to support cultural industries.

The national film institute's (ICAA) Cinema Protection Fund,the key funding body for Spanish cinema, now totals Euros 63.13m.

ICAA's own budget rose by 62%, part of an overall 6.5%increase to culture funding under the Socialists' newly-passed budgets for2005.

The move has been welcomed by Spanish producers. Producers' body FAPAE commented: "The quantity will allow private investment in film production to continue growing. It will contribute to the creation of an ideal atmosphere to attract new investors."

An increase to the Fund has been a key lobbying point forthe industry. As recently as last week's San Sebastian International FilmFestival, the president of the Spanish Producers' Federation (FAPAE) PedroPerez cited a rise "to above Euros 60m" as a top priority.

"Growth of the Fund would allow for films with greaterambitions and a move away from the artisan model," Perez said. Some producershope the increase will allow the sector to stretch to a bigger output as well.

The Fund's budget under the previous Popular Partygovernment had been given a one off increase to Euros 61m last December to payoff outstanding subsidy obligations dating back to September 2001. Some 85% ofthe Fund goes toward paying off automatic box office-linked subsidies.

As voiced by FAPAE's Perez, remaining negotiating points forproducers include enforcing required TV investment in film and raising taxdeductions from 5% to 20%. Perez also mentioned a potential lifting of caps onICAA and TV investments.

Current automaticsubsidies pay 15% of first-year box office revenues and up to 33% of producerinvestment on all films which reach a minimal cut-off mark in ticket sales,with a cap of Euros 900,000 or 50% of the film's budget.