Network: Animated for the big screen

It may not sound like the obvious setting for a revolution, but in leafy Kingston, a young computer animation company is preparing to take on Hollywood.

After two years of unpublicised research and development, Pepper's Ghost Productions (PGP) is putting in place the final pieces of a computer generated image (CGI) production company which, it hopes, will be the most advanced - and, as important, cost-effective - in Europe.

The company is named after Professor John Henry Pepper who, in 1862, astonished the world with one of the first special effects - using light and an angled sheet of partially mirrored glass for a trick later known as "Pepper's Ghost". PGP has a clear and single-minded aim. "We want to move CGI out of its box and to make it appealing to a far broader audience by combining it with drama and art," the managing director, Paul Michael, explains.

The company now has twin processor Pentium 2 NT workstations running 3DS Max 2.5 windows-based graphics packages, motion capture and sound studio facilities, and a Silicon Graphics workstation for video-compositing. Its staff of 30 includes directors, producers, writers, artists and animators.

Yet PGP has resolutely refused to take on lucrative TV commercials of title sequence work for fear of being diverted from its true goal. Spurred on by the growing popularity of CGI in movies - such as Toy Story, DreamWorks' current blockbuster Antz, and Disney's A Bug's Life - and the current vogue on TV for traditional animation aimed at adults, PGP is now developing a number of broadcast projects using CGI.

One is Tiny Planets, a series to teach pre-school children about the world; another is The A to Z of Family Life - an adult sitcom about a retired suburban couple. The company is also planning a series of dramatised classic poems.

"To date, few computer-generated TV series have been seen in the UK," says PGP's executive creative director, Richard Morss. "And what has made it to air - the UK-produced Reboot, and Insector which was produced in France - has been aimed at kids. We want to make it more acceptable to a wider TV audience, with sitcoms and dramas."

Satisfying broadcasters' expectations is not easy. "While they are crying out for new and original programming and are keen to capitalise on the growing popularity of CGI, they don't like much of what they see," adds Alan Marques, PGP's head of digital production.

Although the cost of digital production technology continues to fall, working within a broadcast budget is as much about effective management of the production as about the right software - which is where PGP is confident it can win.

"From the beginning, we wanted to tell stories," explains Sir Peter Michael, Paul's father and the company's chairman and chief executive. "It's a vision I've had for some time, although for many years there wasn't the technology to do it on a sensible budget."

Sir Peter secured an initial investment of pounds 5m from backers, including himself, Lord Lloyd-Webber, and Brian Brolly, former chief executive of the Really Useful Company. Getting the business up and running, however, was always going to be a phased affair. "The ability to make it a true industry here depends not only on producing quality production at the right cost and on time, but also on companies like ourselves being able to make a business out of it," he explains.

This, however, is easier said than done - as a number of other computer graphics companies have learnt to their cost. Which is why a good part of Pepper's Ghost's two-year R&D process was spent developing a sophisticated digital production management system, PG Studio. This allows quick and easy access to any other element of the production at whatever stage and can also analyse which parts of the production could be made more efficient.

PGP also invested in the latest motion capture technology, which reduces the time and cost of animating computer-generated characters. Motion capture is used to track the movements of real-life performers, who are fitted with digital sensors. The data gathered is then applied to computer-generated characters - a technique that is also particularly effective in producing realistic facial movements.

Sir Peter is confident that Pepper's Ghost will start to see results soon. And he is convinced that at last, European CGI will be able to shed its "cottage industry" status.

"We don't think we can take on Hollywood and win, but we do want to do things that they won't laugh at," he says.