Tom Tykwer's action thriller The International has been awarded Euros 4m by the German Federal Film Fund (DFFF).

It isthe third largest amount allocated by the incentive programme after the Wachowski brothers' Speed Racer (£12m) and Bryan Singer's Valkyrie ($6.4m).

The 'German spend' incentive scheme has now paid out almost two-thirds of its annual $80m (Euros 60m) budget to 61 national and international projects shooting in Germany.

According to the DFFF, the co-production between Rose Line Production and Siebente Babelsberg Film for Sony/Columbia will begin shooting on September 15 and has attracted veteran German actor Armin Mueller-Stahl to the cast of Clive Owen and Naomi Watts.

Mueller-Stahl is currently working on Heinrich Breloer's Thomas Mann adaptation Die Buddenbrooks in the role of the pater familias Thomas Buddenbrook.

Meanwhile, Studio Babelsberg confirmed this week to the Leipziger Volkszeitung that it could also become a co-producer on Stephen Daldry's adaptation of Bernhard Schlink's The Reader.

A spokeswoman said that 'negotiations are underway. However, there haven't been any contracts signed yet.'

The paper reported that location scouts had visited the town of Goerlitz in recent weeks to find suitable locations for the film which is set to begin principal photography in the second half of September.

In 2003, Goerlitz had doubled for Paris for the Frank Coraci family adventure Around The World In 80 Days with Jackie Chan and Steve Coogan which was also co-produced by Studio Babelsberg.

Moreover, this autumn should see Berlin hosting the production of Jan de Bont's action thriller Stopping Power, starring John Cusack, which is being distributed internationally by IM Global.