'When Paris sneezes, all Europe catches a cold,' Austria's Prince Metternich famously quipped in the wake of the French Revolution. When Hollywood sneezes, the global film industry catches a cold. That, at least, is the suggestion of British film commissioner Colin Brown as he surveys prospects for UK film production in 2008.

'The British industry, because it is so allied with the US industry, has caught a cold because of what is going on over there,' Brown says, pointing to troubles including the writers' strike.

Amid the uncertainty the strike has created, such high-profile productions as Ron Howard's Angels & Demons, Ridley Scott's Nottingham and the Jerry Bruckheimer-produced Prince Of Persia have withdrawn from the UK or been postponed.

Trouble looming

'(The strike) has made it much harder to put things together. Even if you have a script ready to go, if it has a WGA writer attached to it, you're not in a position to go back to them in terms of any rewrites,' adds Peter Carlton, senior commissioning executive at Film4. 'It's proving very difficult to set up anything that has American cast or potentially involves American unions.'

'The writers' strike has affected a couple of our projects,' adds Jane Wright, commercial affairs and general manager of BBC Films. She adds that the prospect of an actors' strike in Hollywood later in the year is also having an impact. 'For some of our bigger projects that might require a star who is a SAG member, there's a lot of competition.'

Still, bookings at UK studios remain relatively robust. Richard Curtis' new Working Title comedy The Boat That Rocked will shoot in the UK from March, and the latest in the James Bond franchise is shooting at Pinewood. Meanwhile, such projects as Paul Greengrass' Green Zone for Working Title/Universal will shoot in the UK. The Wolf Man looks as if it will shoot in Britain and the next Harry Potter movie is set to shoot at Leavesden.

Matthew Vaughn and Kris Thykier's Marv Films has several projects in development, and Aardman has a full slate of six animated projects in the works, with one stop-frame and one CGI film expected to be greenlit in 2008 by new partner Sony.

Brown points out the slowdown in inward investment may have benefits for local producers working in the UK in 2008. 'If you are a small independent and you can get your money together, you can probably get much better value on your film. There are people who otherwise would be working on one of these big inward-investment movies.'

Low-budget, local production is unaffected by the strike. The question in 2008 is whether this kind of film will be able to find a substantial audience. Some cite the example of Shane Meadows' This Is England, which generated huge interest and positive reviews and yet still made less than $4m (£2m) at the box office.

'It feels as if there is a two-nation system,' says Carlton. 'If you are a studio movie or have studio backing, you have the clout to get a movie into the multiplexes and make it stay there. If you don't, we have seriously to look at other ways of distributing, whether it is the digital screen network or using online.'

The UK's new tax credit system is now in place and appears to be working well. 'It has become a quite reliable and user-friendly investment tool,' says Carlton.

'Everybody is really happy with the tax credit and the way it is working,' agrees BBC Films' Wright. 'It's straightforward and easy to administer.'

Still, there is ferocious competition for US production, not just from European studios but also from US states, many of which now offer their own tax incentives. With a still punishing exchange rate (of more than $2 to £1), the UK can prove an expensive place for US producers to work. Meanwhile, co-production remains an area of concern. 'We have to look at co-production very, very carefully,' says Brown. 'The way the new tax break works is not nearly as advantageous as the old one - and that's just mathematics.'

Slates of 2008

Even so, at the beginning of 2008, British producers are striking a bullish note about prospects for the year ahead. 'There are a lot of interesting, eclectic voices out there. It is not just Working Title continuing to go from strength to strength but independents,' says DNA's Allon Reich, citing films such as Control and Son Of Rambow as examples of the diversity of talent now at work in the UK. DNA's most advanced projects for 2008 are its big-screen version of The Sweeney and Kazuo Ishiguro adaptation Never Let Me Go.

In addition to its low-budget fare through Warp X, Film4 also has several other high-profile projects likely to be ready in 2008, among them Peter Jackson's Lovely Bones, Danny Boyle's Slum Dog Millionaire (already shooting in India) and Toby Young adaptation, How To Lose Friends & Alienate People (in post-production after a UK and New York shoot). Steve McQueen's Hunger, about IRA hunger striker Bobby Sands, may also be completed by early summer.

The boom in high-profile costume dramas will build on Brideshead Revisited and The Other Boleyn Girl, with new shoots including Wuthering Heights (Ecosse Films) and Mary, Queen Of Scots (with Capitol Films on board).

BBC Films has a number of projects in post production, including The Edge Of Love and The Damned United, on which BBC Films is partnering with Andy Harries' Left Bank Pictures and is due to begin shooting in Yorkshire in April. Meanwhile, BBC Films' first collaboration with comedian/satirist Armando Iannucci is likely to shoot this year. A new Pawel Pawlikowski project is picking up speed. The BBC is also partnering with Pathe on Jane Campion's John Keats project, Bright Star.

'Money is going to be tighter (in 2008),' producer and former head of BBC Films David Thompson suggests. 'Hedge funds, credit - all these things are real issues. Another negative factor is that there are too many films being made. When you open the papers and see 12 films reviewed each week, you think, 'Bloody hell!' But the positive factor is that there are more and more good projects in Britain around which we can make some real noise.'