The new UK film tax credit may hamper thedevelopment of some co-productions but shouldn't stop UK and French producers from workingtogether. That was the message reiterated at the Franco-British co-productionmeeting hosted at this weekend's film festival in the French seaside town of Dinard.

The conferencechair, producer Nik Powell of the National Film and Television School, noted that one move that might helpeasier cooperation for French producers trying to work with the new UK tax credit is that the points text for qualification will soon be administered bythe UK Film Council rather than the UK's Department of Culture Media and Sport.A UK Film Council spokeswoman noted that the handover of the approvals processto the UKFC might not happen until spring 2007 and that it would require newstaffing and a clear separation between other UKFC activity.

Francois Hurardof France's film agency CNC said that news was very welcome. "Wehave had trials dealing with DCMS and it will make it a much easier time whenthe Film Council has the remit to approve the films," he said.

The UK tax credit has been approved within the UK government but has yet to be signed offon by the European Union's State Aid Commission. That approval is expected inthe coming weeks although experts have noted that the EU might ask forrevisions of the proposed new tax law.

John Graydon of UK accountancy firm Tenon Media noted thatthe new UK laws would be easier for domestic andforeign producers to navigate than the previously convoluted sale and leasebackmeasures had been.

Graydon did notethat the tax credit's basis only on UK spend (and its minimum 25% UK spend) "does present a disadvantage forco-producing but there is still a role for co-productions in the future".

He also noted thatthere is the same benefit whether the UK spend is 80% or100%, which could encourage some minority shooting outside the UK. "Subject to practicalities you might aswell spend 20% somewhere else," Grayson noted.

In otherencouraging news, UKFC Premiere Fund head Sally Caplan noted that there was thepossibility for the UK to establish a new specific fund forminority co-productions.

Hurard of the CNC noted that France's film tax laws had recently beenamended following EU review. The French tax credit can now cover up to 16% ofan approved French-language film's budget (in reality the average is more like9%) but is capped at a limiting Euros 1m credit per film.

Hurard notedthat the system seems to be working well for low-budget films.In all, therewere a record 240 French films produced last year, including more than 50minority co-productions.

Hurard alsonoted the growing importance of French regional funds - which have beenrecently energised and also have every Euros 2 they lend in support backed by anadditional CNC investment of Euros 1, up to totalinvestment of Euros 30m per year.

JJ Lousberg ofthe UK Film Council noted that it's not just tax issues that can bring foreignproducers together and he advocated measures that would reduce paperwork betweenforeign bodies and establishing of a common framework for legal and otherprocesses. "That is one of the obstacles of systems not being in sync and wecan do something about that relatively easily," he said. "We can work togetherto establish certain standards of practice."

The DinardFestival du Film Britannique opened Thursday with a gala screening of StephenFrears' The Queen; the event runs through Sunday. Producers who attended theseminar from the UK included Sally Hibbin, Rachel Robey;Stephen Evans, Arvind David, Simon Relph and Matthew Justice, French delegatesincluded Sophie Bourdon and Phillippe Carcassonne. Special guests in Dinardinclude Leslie Phillips, Brian Cox, Shane Meadows, Charles Dance, RogerMichell, Charlotte Rampling and others.