HOLLYWOOD UK, JUST OFF THE M25 JUST OFF THE M25

THE OUTDOOR lot at Pinewood Studios is getting ready for a big production. Men in paint-smeared dungarees and big boots are humping panels of chipboard about and building pagodas. Scaffolding towers loom up from the special-effects water tank, the largest outdoor tank in Europe, which will shortly contain 880,000 gallons of water and a dozen live sea lions splashing about on custom-built rocks. A 60ft high backdrop has been painted to look like a forest. There is also a tiger enclosure, and a lion pen, because the 52- acre outdoor film set is being turned into a zoo. It is one of the requirements for Universal Studios' new comedy, the sequel to A Fish Called Wanda which reunites John Cleese, Jamie Lee Curtis, Kevin Kline and Michael Palin. The feature will take up not only the outdoor lot, but several of Pinewood's stages for several months.

It is no wonder that everyone at Pinewood - still owned by its British founders, the Rank Organisation - is smiling. Remarkably, the studios are bursting at the seams. Each one of Pinewood's 18 drive-in stages, ranging from 2,500 sq ft tiddlers to vast 40,000 sq ft sets, is booked solid until next year.

Tom Cruise is on a return visit after Interview With the Vampire, back to do his next film, Mission Impossible. Then there are Gerry Anderson's puppets, starring in Space Precinct, and any number of television productions and commercials. Business is so good that Pinewood has spent nearly pounds 1 million to build two new stages and the studio has pencil bookings for productions into 1997.

In the 1980s the British film industry went through stop-go, boom-bust tribulations. Successes like Chariots of Fire and Gandhi inspired British scriptwriter Colin Welland at the 1982 Oscars to announce that "the British are coming" - but soon afterwards he regretted his words. Now-adays, Pinewood's order books look like our indigenous film industry - alive and kicking.

The British film studios are sort of country cousins to Hollywood. Strung out neatly along the westerly curve of the M25, they sit, workmanlike, beside sweet Home Counties villages with riding stables and avenues of flowering chestnuts: Shepperton, near Hampton Court; Pinewood, a stone's throw from Eton College; and until it closed two years ago, Elstree, near St Albans. Together they present what we proudly called our own Hollywood.

The studios were built out of town, partly to avoid the glare from the London street lights, thus enabling outdoor, night shoots. Elstree was the first, built in 1924, the home of British International Pictures. The first British talkie, Blackmail, was directed here by Hitchcock; The Dam Busters was made here, as were the Star Wars and Indiana Jones series.

Elstree soon had a rival. Following the Cinematograph Act of 1927, which obliged British distributors to show a quota of British films (resulting in the much derided production, the "quota quickie"), the fledgling industry needed much more space. Cinemas were thrown up across the country, and studios built - most importantly Shepperton (in 1932) and Pinewood (1936), the brainchild of J Arthur Rank, the milling millionaire who bought a mansion in Buckinghamshire for his new film factory.

By 1936, Britain was making 212 films a year. But 60 years on, with quotas a thing of the past, Hollywood in pole position and American film distributors pulling all the strings, the British film business had become something akin to a horror movie. The depths were plumbed in the late 1980s when the few productions shot here were, largely speaking, American-funded cinematic disasters like Shanghai Surprise or Three Men and a Little Lady.

But now the news is better. According to Sydney Samuelson, the British Film Commissioner, "the last 12 months have witnessed a new energy taking hold of the British film and television programme-making industry, and a 21 per cent increase in investment in the UK production sector".

Flush with the success of Four Weddings and a Funeral (partially shot at Shepperton), American movies are apparently rushing back, and the stages are crammed. You want proof? Even Goldeneye, the new Bond movie starring Pierce Brosnan as the tuxedoed hero, couldn't get into Pinewood, and is currently being shot at a customised former Rolls Royce aerodrome near Watford.

A total of 91 films were made in the UK last year, compared with just 30 in 1989; and production expenditure of pounds 457 million was the highest since 1985. Even typical all-American products such as Judge Dredd and the Muppet movies, which would be perfectly at home in California, are being shot in the UK.

The signs of success are easy to see. The car park at Shepperton studios is packed. The little petrol station opposite the grand Pinewood gates has lines of account-holding film employees queueing to fill up their cars and trucks. Freelance staff are again in continuous work, going straight from one shoot to another, like they did in the old days.

But do not be mistaken. There is a renaissance, but it is largely American-driven. This is not the legacy of the Boulting Brothers, the directing twins John and Roy who ran British Lion Films and made legendary 1950s movies such as I'm All Right Jack at Shepperton; nor even the legacy of Gerald Thomas, director of the Carry On films, who was at Pinewood for 40 years. As one of the hefty stage constructors said to me, marching past the lion pens: "We're backed by the Yanks. They're not our films. All we do is make arty things which no one else wants to see."

Steve Jaggs, Pinewood's managing director, puts it slightly more subtly: "You must realise there's a difference between the British film industry and British films. We had a two- or three-year drought in the late 1980s, but the British film industry is currently buoyant, because we have encouraged the Americans to come over.

"We provide everything we can for them, and try to make it financially attractive. But when I speak of the British film industry, I mean the studios and the facilities, not the movies. There is still a problem with The British Film: we still have to make it internationally appealing."

Jaggs admits that much of Pine-wood's business, between a third and half of all bookings, now comes from television and commercials. They've shot Strike It Lucky there, with Michael Barrymore, and Parallel 9, the BBC's live Saturday-morning children's show. Oh yes, and adverts for a Sunday newspaper, and a doomed cable pilot, optimistically entitled Heil Honey I'm Home, that was based on an idea about Hitler living next door to a Jewish family. It's not quite the great stuff of cinema that the moralist J Arthur Rank had in mind when he founded Pinewood with a desire to make "religious films or those with a strong moral theme". But at least it's all keeping the place going.

Pinewood likes to think of itself as the Number One British studio, somewhere ahead of Shepperton, its principal rival. Both studios say they are making money, and the cost of hiring space certainly doesn't sound too extortionate for cash- rich Americans. Renting a stage at Pinewood starts at pounds 2,250 a week, rising to around pounds 13,000 for the giant Albert R Broccoli studio where 14 Bond movies were made. The costs are much the same at Shepperton but you only get the space for these sums. Cameras, lighting, ladders, paint sprayguns and plasterers' studios are all extra. Renting a Super Star Suite for your top actress to rest in would be another pounds 495 a week at Shepperton.

Commercials and TV shows are fine for the studios but what they really want are nice long feature films, like the recent Richard Gere movie First Knight which moved in to Pinewood for weeks, commissioned a copy of Camelot to be built and organised 1,000 extras to run around in medieval tabards.

Pinewood feels like a mini-Holly-wood. Steve Jaggs led me under the Rank "gong" clock, past two stone sphinxes and towards the vast sheds with acres of lighting strung on the ceilings where the films are shot. Here, every director's fantasy can come true - veritable Mount Etnas and whole cities are built out of scaffolding and plaster in a matter of days. We pass prop houses and carpentry workshops full of people beavering away, and little trucks with men in them wheeling stacks of shiny film canisters around.

The Albert R Broccoli "007" sound stage, named after the producer of the Bond films, towers over the horizon. At 40,000 sq ft, it is the largest "silent" (ie soundproof) stage in the world.

"I go to Hollywood three times a year to sell Pinewood," says Jaggs. "We have numerous pencil bookings, but I have to make sure some of them turn into green lights. I've discovered that Americans tend to come here for four main reasons. One, the demands of the script - if you need a castle, or a period location. That's quite in at the moment. For instance, the new Julia Roberts movie Mary Reilly needed to be shot partly in Edinburgh. If you're coming all the way over here for Edinburgh you might as well do the studio stuff in the UK. Same with Princess Caraboo, which needed the Royal Pavilion in Brighton. The second reason is that our facilities and technical capabilities are superior to most other contenders outside America. Then three, money and budget. When the pound is low against the dollar, it's very cheap for them to come here. Four, language. It may be cheaper to film in eastern Europe, but American directors like to know that when they say 'Cut', everyone knows what they mean."

Everyone in the studios knows precisely what the Americans mean. Along the M25 at Shepperton, recently bought for pounds 12 million by the Hollywood-based British directing brothers Ridley and Tony Scott, no one is under any illusions.

"The Americans are our paymasters," says studio manager Paul Olliver. "They control what is made, and what is distributed. They like us because we can provide a pool of mostly theatre-trained actors who can cope with a demanding script, and because it's cheaper to come here. Since we left the ERM, we've had a serious price advantage. We all get a little jumpy when the pound starts to rise against the dollar, but at the moment the pound is low, so it's great."

Currently occupying two of the stages at the Scott brothers' 26-acre, 17-stage empire is The Muppet Treasure Island, the new extravaganza from the Kermit stable, starring Tim Curry, Miss Piggy and a giant galleon which appears to plough through a choppy sea but is actually pitched and tossed by enormous levers.

Sliding open the door to the Muppet stage and walking in under the studio's yawning 40-feet height is like landing in a sort of enlarged Robert Louis Stevenson-inspired fantasia. Muppets and dwarfs, dressed as pirates, are in full song. A runner comes past holding an important-looking clipboard. "With the Scotts taking over Shepperton, it's official - this place is here to stay," he confides. Indeed, since Ridley and Tony between them have directed hits including Blade Runner, Alien, Thelma & Louise and Top Gun, the runner may be right. The brothers clearly know how to make the ind-ustry work. "Their coming gives us a sort of ring of authority," continues the runner. "But it's still all American money. And it's just like working in America."

This caveat resonates through the industry. "Four Weddings was a fluke," a leading figure in a British film company tells me. "And a fluke doesn't make an industry. We need to produce 60 home-grown films a year to have an industry. At the moment each studio produces about six. Yes, if Tom Cruise in Mission Impossible is a hit, it may attract other features to Pinewood, but the studio can only handle two movies at a time. Why is this? They used to handle seven or eight. Why, for example, didn't they build another stage for Goldeneye, the new Bond?

"As for our own film industry - I don't mean our studios - that's just being kept alive by TV moguls and a nexus of Channel 4, the BFI and the BBC. It's not a proper film industry. The scale's all wrong - small scale doesn't make big hits. A big hit is not Truly, Madly, Deeply. A big hit is Last of the Mohicans.

"Oh yes, the studios will keep existing in Britain, but only because there are now only two big ones left," the insider says. "But we have no industry of our own to prop them up."

What then of the British Film Commission's optimism? "My view is that there will be increasing demand for our studios," Sydney Samuelson retorts. "Television and cinema have a voracious appetite which has to be catered for in all aspects of the moving image. I include everything in this - CD Rom, corporate videos, television productions, as well as features."

"As far as the studios go," says Wilf Stevenson, head of the British Film Institute, "with Shepperton now bought by the Scotts, and two new stages at Pinewood, things are looking good. Yes, it would be nice if the Government provided tax breaks for American film-makers but I believe the quality of the product is more important than financial incentives."

But if things are good at Shepper-ton and Pinewood, let us travel a few more miles along the M25 to Elstree, once the third arm in the great triumvirate of British studios. Today, Elstree is a sorry sight, derelict and closed down. Brent Walker, the beleaguered leisure group, has been the unhappy owner since 1988. It bought Elstree for pounds 32.5m during the property boom because it already owned post-production companies, and the idea was to invest in Elstree and run the two interests in tandem. But over-expansion and recession forced closure.

When, in 1993, Tesco offered to buy half the site for pounds 19 million to build a superstore, Brent Walker accepted at once. Half the studios were knocked down and the Star Wars stage was broken up and flogged off to Shepperton. The local council, Hertsmere, agreed to the sale on the strict condition that Elstree's remaining 15 acres and three remaining stages were developed as a new studio complex.

But it never happened. The remaining studios are closed and Brent Walker is looking for a buyer. It wants to sell the site for a "retail park". Wandering around what's left of the studios is a sad experience. The closed buildings look more like derelict DIY superstores than studios where dreams were fulfilled.

"We were losing pounds 720,000 a year when we took Elstree over," says Brent Walker's Tim Quinlan. "They are an albatross. No one wants to run them as a working studio. They're not viable."

This is not strictly accurate. The American giant, 20th-Century Fox is believed to have offered pounds 1 million for Elstree. Brent Walker, which says the site is worth 10 times that, turned them down this very week. The council is pledged to preserve the studios but Brent Walker's argument is persuasive. Even the director Alan Parker told the National Heritage Committee last year that "the only reason we have two full studios is because we have lost the third".

Elstree's long, brick administration block, which was opened by Princess Anne in the 1970s, once housed hundreds of people. Today, it is inhabited by two people from the Children's Film and TV Foundation. Opposite, the torn awnings over a wine bar, optimistically called Oscar's, flutter above locked doors.

"This is where Moby Dick was filmed," says Paul Welsh, looking down at a weed-filled tank in the back lot. Welsh is in charge of the Entertainments Department of Hertsmere Council. A film buff, he heads Save Our Studios, a campaign which has gathered 25,000 signatures to save Elstree Studios.

"When I look around, I see broken promises," says Mr Welsh. "Brent Walker had a legal commitment with the council to recreate the studios.

"It was to be a studio for the 21st century. It could be have been the best in the country. Film companies are renting warehouses and factories to shoot in when they could be here. It's a tragedy." Hertsmere Council say they are willing to "go the distance" with Brent Walker; if necessary they will go to court for a compulsory purchase order and use the Fox offer to force a sale.

Back at Shepperton, the contrast could not be greater. In the long canyon corridors men are scurrying in and out of studios with pieces of plasterwork, bolts of black velvet and scaffolding poles. Like Elstree, it is deathly quiet. But there are 2,000 people working on site, everyone cocooned within the sound-proofed studios, offices, workshops and stages.

A long-awaited verdict from Stephen Dorrell, Secretary of State for National Heritage, is expected soon on whether the Government will change its rules to give film investors tax breaks. It is the next stop in the bust-boom cycle in British films. Investment must be secured to ensure buoyant times can be maintained; until then, everyone is just thankful that the pound is low and the Americans are crazy for The Madness of King George and anyone in morning dress. But the saga of Elstree, only an hour from Shepper- ton, is a stark reminder of how brittle this particular slice of showbiz is.

! Rosie Millard is Arts Correspondent of the BBC.