Hollywood bows down to Potters

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Spending topped £840.1million thanks to the Potters and other films including Atonement and His Dark Materials: The Golden Compass.

This compares with £568.8million in 2005 and represents Britain's second best year since figures were first kept.

There were 134 feature films made in Britain last year, up from 124 in 2005.

Fifty of these were made by British production companies, 27 with more than 50 per cent outside investment and 57 were British co-productions.

Investment from international filmmakers went up to £569.6million from £312million in 2005.

Although British production companies made 50 movies last year - up from 37 in 2005 - the spending on such films fell to £148million from £166.3million the year before, a report by the UK Film Council revealed. The closure of a tax loophole ending an artificial inflation of costs was partly to blame for the drop.

John Woodward, chief executive of the council, said: '2006 was a great year for film production in the UK.

'We are back in business with British film-makers winning international awards and British talent and facilities in demand from film-makers around the world

'The new tax credit will ensure that Britain stays one of the best places in the world to produce a film.'