UK support body the Film Council is aiming to slash production costs under a code of practice for films budgeted at $3.1m - $6.2m (£2m-£4m).

Producers body PACT and crews union BECTU are already negotiating an agreement based on the code, which, coupled with other proposals in the Council's report, aims to save up to $1.6m (£1m) per film. The code hinges on reducing crew numbers and changing traditional work patterns, along with the radical step of giving crews a share of future revenues.

The report, written by veteran producer Simon Relph, argues that so-called small-scale UK films are dangerously expensive, often costing twice as much as comparable films from the rest of Europe or the US. Relph told that the current dearth of TV deals and overseas sales meant fewer films were recouping their budgets.

Under the code, slimmed down crews would work for basic rates, without guaranteed payment for overtime, and shooting schedules would be longer. Traditionally, crews work for up to 72 hours a week during a tight shoot rather than the basic 40. Crewmembers would receive "an element of deferral", envisaged as a share in the revenue corridor rather than just deferrals linked to any future profits.

BECTU, whose agreement will be crucial, and PACT have been discussing the problems outlined in the report for several months while the council deliberated over whether to go public. The union said the debate was long overdue and that the proposal would not necessarily mean less overall income for its 25,000 members.

"It is not an attempt to cut the rate for the job," said acting general secretary Martin Spence. "People may come out with less on one particular film. But as a whole, there will be more work around."

Crew members may not even take home less per film, but they would have to work over a longer, if less intense, period, meaning they may not be able to fit in as many productions in a year. But, with production levels falling in TV and commercials as well as film, crewmembers are hardly rushed off their feet all year round at the moment.

Spence did not foresee any stampede of BECTU members to other media, pointing out that production levels in TV and commercials are also falling. "It's tough out there," he said.

BECTU pointed out that the code also calls for producers to give guarantees on minimum conditions and payment. Spence added that BECTU had long wanted different rules for films of different budgets, as actors and musicians currently have.

"The idea that there is one way of making a film, whether it costs£50m or£2m, is a nonsense," he said. "We may have members who will say that this is not going to work and want to reject the whole approach, but I know it won't be all members. There is a variety of views emerging, it is an interesting document."

But he added that parts of the report were "moderately offensive" and involved "casual, throwaway comments". The report calls for crews being willing to live "outside the normal expectations of first-class hotels and catering." He said that the report's call for greater multi-tasking opened up "obvious" health and safety concerns.

Another potential flashpoint is the report's call for a register of crew who have signed up to work within the code. "I'm not sure what that is going to mean," Spence said.

He added that it was producers who needed to change their attitudes, suggesting that they, rather than crews, were tied to one way of working.

Indeed, the report argues that producers and their sales agents have some interest in keeping budgets high as producers' fees and overseas sales are calculated as percentages of the budget. The report proposes that fees should instead should be linked to the cost of mounting the whole production.

"There is a need for a radical rethink about producers remuneration," the report says. "Producers should be rewarded rather than punished for keeping the budget down and rewarded further if they cut fees and overheads, make substantial deferrals or do a good job containing cost during production. Producers who give up a substantial portion of their fee should be treated in a similar way to other equity investors."

The report, based on a survey of 26 UK films, argues that a formal code of conduct is the only way to change ingrained attitudes on both sides. Relph said the crossover of producers and crews from big budget productions, often US films shooting in the UK, creates unrealistic expectations of fees, practices and conditions. The recent boom in production is also said to have driven up costs.

"There is a huge force of inertia created by a sense throughout the industry of the way things should be done," the report states.

In an eye-popping comparison, the report cites an unnamed UK film costing more than $4.7m (£3m), saying that it is comparative to an unnamed French film budgeted at just under $3.1m (£2m) and a German film costing an astonishing $935,000 (£600,000). US, Danish and Spanish examples come in between $1.6m (£1m) and $2.3m (£1.5m).

"Films from mainland Europe generally use fewer people and pay them well for normal hours and longer schedules. British producers tend to throw lots of people at a short schedule with bought out overtime. American independents do the same but pay very little."

Relph acknowledged that the US independent films were often crewed by newcomers looking to break into the industry. In the UK, films costing $3.1m - $6.2m are part of the mainstream and typically crewed by experienced professionals.

BECTU also questioned the European comparisons, saying the films in the report were "anecdotal" and that many productions on the continent had similar shooting schedules to those in the UK.

Worryingly for whether the code will work, the report concludes that the UK is "one of the most expensive places to live and work", a fact which is largely beyond its control.

But Relph sees the report as a way of sparking debate rather than a solution in itself. He said he did not want to shoehorn all films into the code, adding that it might not apply to films such as period pieces. Instead, he believes that more films should be conceived as low budget from the script stage and designed to maximise their potential practically and creatively.

He cited Paul Paulikowski's Last Resort, the acclaimed micro-budget refugee story originally made for BBC TV.

"Paul Pawlikowski went out with a crew that was not much larger than crews on a documentary," Relph said. "He obviously had budget in mind, but it was also a creative decision."