Cinecitta holding president Pupi Avati has approached the Venice Film Festival and Mifed with plans to establish a new film market on the Lido to run alongside the festival.

The collaboration between the three organisations is believed to involve several initiatives, although the market element is likely to create the most buzz - particularly with Mifed facing direct rivalry from the American Film Market which will move to compete with its autumn slot in 2004.

"The idea is to create a joint company [between Cinecitta, Mifed and the Venice Film Festival]," said Venice artistic director Moritz de Hadeln. "Mifed has realised the importance of the backing of the Venice Film Festival, and Venice would greatly benefit from the backing of Mifed."

For the time being, there are no plans to change Mifed's location from Milan to nearby Venice, according to de Hadeln. Instead, Mifed would "help Venice build a market" which would be housed in five large empty airplane sheds near the Lido airport.

"There is plenty of space there for offices and stands. Venice could also build a permanent structure to replace the screen that is currently housed in a temporary PalaBNL tent - which is very expensive to keep taking down and setting up again every year," de Hadeln told Screen Daily.

De Hadeln said rumours are also circulating that the city of Venice may buy the space near the airport. "There is a lot of potential. The Lido is a dying place and needs new life," de Hadeln added.

This year, the Lido will again host the Venice Screenings and provide office space for visitors to conduct business. However, de Hadeln says a reduction in government funding for festivals has stopped the screenings from really taking off.

"The festival currently operates on a budget of Euros 5.5m, which is very low - even lower than Locarno," he said. "We really need Euros 7m."

Neither Avati nor Mifed could be reached for comment at press time.