The Government's policies on the film industry were last night roundly criticised by an Oscar-winning producer, who claimed that the outlook for making movies in the UK was the bleakest for 20 years.
Michael Kuhn, the chairman of Qwerty films and a former president of Polygram, also attacked the Film Council and the BBC.
Speaking at the inaugural Pact Film Lecture at Hamilton Place in London, Mr Kuhn, who has overseen the production of 14 Academy Award winning films, said: "We face the bleakest prospect for indigenous UK production since I started in the film business in the mid 1980s.
"When I first came back to the UK in 1999 after nine years in Los Angeles building up and running a studio, I would have thought that what needs to be done is find a way to ensure that when we have hits we have structures to ensure that we get a fair share of the profits to pay for flops and make the numbers work.
"Little did I think that the pressing issue now, is how are we going to get made at all those £10 million and under films that generally we make here in Britain."
The UK film industry has been struggling to formulate a sustainable funding model since Gordon Brown, the Chancellor of the Exchequer, announced last year that the Government was replacing Section 48 tax relief, which was costing more than £2 billion a year, with a tax credit that would go directly to producers rather than investors.
Mr Kuhn, whose production company recently made I Heart Huckabees, Stage Beauty and Kinsey, called on the film industry to defend Section 48 and suggested the relief should be extended to films costing more than £15 million.
"If you look around the world, you will see that in almost every significant country, the national industry gets a tax break of 10 to 15 per cent and sometimes higher," he told an audience of 200 senior producers and executives.
"We should have those benefits but because of language we have to compete with Hollywood for talent and markets, and we need equal broadcasting intervention plus additional cashflow support.
"Instead of giving up on S48, we should defend it. Existing practice clampdowns have largely stopped abuses of S48 and its continuance is simple and straightforward."
Mr Kuhn also rounded on the Film Council - criticising it for ineffectual support of the industry.
"To many of us it seems that this Janus-like body, representing us to the Government but not representing us; representing Government to the industry but helpless in light of, and blindsided by, recent tax changes, not hearing criticism because it is the most powerful dispenser of patronage, is in need of reform."
To save the industry from imminent collapse Mr Kuln called on the Film Council to procure a "gap fund" to lend "the last £1 million or so a film needs to get into production".
He also called for a pre-buy of digital video-on-demand rights, a borrowing facility against foreign estimates and a low budget film slate fully funded by TV, the Film Council, regional bodies, existing tax subsidies and a UK distributor.
The BBC also came in for criticism, with Mr Kuhn calling for a levy on the broadcaster, which last year spent 84 per cent of its film acquisition budget on American movies and only 14 per cent on recent British films.
"The BBC has nearly £3 billion per year of public money. Our industry discovers and supplies massive talent to all broadcasters but particularly the BBC. This lack of reciprocity cannot be allowed to continue.
"Some form of equitable voluntary or compulsory additional contribution must come from those industries who benefit directly and indirectly from the UK film industry."
But in a statement released to Times Online, the BBC defended itself and said it was committed to the UK film industry.
"The BBC invests £10 million per annum in British film in partnership with the UK Film Council and a wide number of production companies.
"Talent flows between the BBC and the film industry in both directions. Richard Curtis and Paul Greengrass both began their careers in television, as did a large number of other talented filmmakers including David Yates and Tom Hooper. It is a symbiotic relationship and one which the BBC does much to nurture.
"As part of our commitment to developing a comprehensive film strategy policy we have met with both the UK Film Council and Pact."
Mr Kuhn ended his speech by outlining his vision of how the digital revolution would transform the future of the industry.
He predicted that video-on-demand and e-video services would undermine the domination the studios had over distribution and that this would provide an opportunity for the British industry.
He called on the Government and the City to help fund "a massive international marketing push" to help UK films take advantage of these new channels of distribution .
Sarah Walker, the director of communications at Pact, the TV, film and media producers' association, said the Film Lecture was to become an annual event "to put the film industry’s key issues on the agenda".
