The Italian government is pressing ahead with plans to overhaulthe statute of the Venice Biennale, the state body that runs the Venice FilmFestival, and has now approved a draft law to turn it into a foundation thatwill be partly financed by private individuals.

The government's greenlight comes on the shoulders of a hugepolemic which erupted in Italy after the media got wind of plans for the VeniceFilm Festival to be run by the state-owned Cinecitta Holding and National FilmSchool, as well as the Biennale.

Critics argued that the new organisation would potentiallyundermine the festival's autonomy and cause a massive conflict of interest, sinceCinecitta is directly involved in the promotion of Italian film.

The government appears to have heeded at least some of the local industry'sconcerns. Last week at Mifed, Italian Culture Minister Giuliano Urbani saidplans for the Venice festival to be run by the Biennale, Cinecitta and theNational Film School, had been dropped.

Nevertheless, it has now emerged that while Cinecitta and theNational Film School will not directly manage the Biennale, they willapparently act as consultants, and as such, will have a say in the festival's programme.

The government said the Biennale will now be turned into aFoundation whose board of directors will be appointed for three years.

On the board itself will be the government-appointed Foundationpresident, as well as the mayor of Venice, the president of the Venice region, and,importantly, three private individuals who will have provided at least 20% ofthe Foundation's funding.

The Biennale's overhaul is expected to take place in December.

Meanwhile, the position of current Venice Festival chief Moritz deHadeln is still up in the air, although the local film industry and Biennalepresident Franco Bernabe have publicly supported the Swiss director.

Earlier this month, Italy's independent producers association(API) officially asked Urbani to guarantee that the Venice Film Festival willbe run without any kind of political interference whatsoever.