Up to 40 British films could be scrapped before the cameras even start rolling after the government suddenly plugged a tax loophole and sparked a financing crisis in the movie business.
Movie moguls are ringing alarm bells but the Treasury insists it was right to act and still firmly backs the billion pound industry, which in 2003 enjoyed its best year ever, making the next Harry Potter and Bridget Jones films.
Producers with movies in the pipeline reached for the panic button after the Treasury blocked a tax loophole used by funding agencies to raise millions for new movies.
It clamped down last month on schemes that let investors cut their income tax liabilities by joining partnerships funding UK films.
One immediate casualty was The Libertine, the tale of a courtier's debauched life starring Johnny Depp and John Malkovich. Another facing the axe was Tulip Fever with Jude Law.
Mr Malkovich complained: "suddenly what was legal one day in February was illegal the next."
"The worry I would have is what long-term effect it will have on those who come from abroad and like shooting here," he told The Daily Telegraph after The Libertine was moved offshore to the Isle of Man in the Irish Sea where the film commission agreed to finance 25 per cent of the production.
"Why wouldn't you in future go to Romania or Bulgaria or Hungary which are probably a third of the price and take a few of your English crew with you," Mr Malkovich asked ominously.
The Treasury, portrayed in the press as the movie bad guy, staunchly defended its surprise attack.
"The government simply cannot be expected to stand by and let people who are drawing up complex and abusive schemes take advantage of a loophole in the relief and avoid tax at the expense of honest taxpayers," a Treasury spokeswoman said.
"We are looking at very, very rich people trying to shelter their income from tax," she said. "It is necessary to act quickly when these schemes come to light."
The Film Council, the industry's lead body, has been locked in urgent talks with the government to see whether lifelines can be thrown to productions with financing in chaos.
"We are working like blazes to see if something can be done," said a Film Council spokeswoman. "This caused a bit of a nightmare for productions about to roll."
"There has been an immediate impact on films about to start and films a few months down the line," she said after the council looked into the prospects of 42 films in the pipeline.
"It is impossible to say if, what and when this will happen," she said. But industry leaders are reassured that the council and the government are at least talking.
Some argue that talk of gloom and doom is exaggerated. "I think it's a done deal, but it's not as bad for the industry as the industry is making out," said film tax accountant Adrian Douglas, manager at the Moore Stephens accountancy firm.
"All the money is still there. Generically speaking, you change the structure of the partnership to fall back in line with what the revenue said you could do," he said.
But the timing, he argued, was harsh. "All the budgets have been done, the marketing is under way. It would be more reasonable to wait until the tax year was finished (in April)," Mr Douglas said. Mr Malkovich was the first to agree that cries of "foul" could fall on deaf ears, conceding: "Who has sympathy for a bunch of prancing Hollywood luvvies who can't do their movies?"