TheUK film industry is hoping the government will make an announcement today onthe future of tax incentives for productions.

Chancellorof the Exchequer Gordon Brown has been pushed hard to address the future of theSection 48 concessions in this afternoon's Budget.

Butindustry sources suggest that the most likely outcome is a short-term fix with thelong-term future remaining unresolved until after a general election, expectedin May.

Thatmay mean an extension to the July deadline for the end of Section 48 support,rather than any further detail of the tax credits due to replace it.

Sourcessuggest that an imminent election has slowed developments but they say therewas little inclination at the Treasury to make big concessions on tax in anycase. The exploitation of loopholes is said to have angered ministers.

Changes to the tax regime and doubtsabout the future have already hit the local industry hard.

With other factors, like the weakness ofthe dollar, increasing the pressure on finance, the number of British filmsproduced in the UK fell 40% in 2004.

For details of the Chancellor's tax announcements, later today.