Lights, cameras, blockbuster: The return of James Cameron

It might seem odd that the director of the most successful film in Hollywood history would fail to make another feature for more than 10 years. Then again, anyone who has worked with James Cameron - including those who worked on his blockbuster smash, Titanic - could probably list a few reasons why.

Yes, he has consistently proved himself to be box-office gold, thanks to such titles as Aliens, The Abyss and the first two Terminator movies. Yes, he has a unique gift for science fiction and action-adventure films that marry cutting-edge technology with surprisingly profound philosophical reflections on the impact of that technology on our fate as human beings.

But the man is also, by all accounts, a nightmare to work with. Studios have come to fear his habit of straying way over schedule and over budget. He is notorious on set for his uncompromising and dictatorial manner, as well as his flaming temper - he's been called the film-making equivalent of Attila the Hun.

On True Lies, his 1994 picture with Arnold Schwarzenegger and Jamie Lee Curtis, he informed everyone on set that going to the lavatory was a fireable offence, and he meant it. On Terminator 2, his crew made T-shirts that read "You Can't Scare Me - I Work For Jim Cameron".

Titanic, meanwhile, was one of those movie-world triumphs that threatened at every stage to turn to total disaster. The original budget of $100m, already considered extravagant, kept ballooning until it hit $200m - at the time, the most money ever spent on a film production.

The shooting schedule, which started out at 138 days, mushroomed to 160 days - almost six solid months. Titanic missed its scheduled summer opening date, causing palpitations among the nervous executives at Fox who saw visions of another Heaven's Gate - Michael Cimino's notoriously lavish western that bankrupted United Artists in the early 1980s - ready to swallow them all.

Bill Mechanic, the executive who had the misfortune to take over the Fox studio while the Titanic production was in full swing, quickly calculated that the only way he was going to make a cent was if the film became the biggest-grossing movie of all time. Luckily for him, it did.

The tales from the set, meanwhile, were so lurid that they took on a life of their own, making it hard to separate fact from fiction. We do know that on an early part of the shoot, in Nova Scotia, someone sprinkled the drug PCP into a batch of lobster chowder, affecting just about the entire crew, Cameron included, and sending several dozen of them to hospital. The supposition, never substantiated, is that the prank was pulled by a disgruntled crew member, or just possibly by a catering crew furious at being replaced shortly before the Canadian part of the shoot wound up.

When the production moved to Mexico, and literally thousands of extras and stuntmen re-enacted the sinking of the Titanic on a replica built to 90 per cent scale, Cameron imposed a work regime that left everyone else reeling. After spending hours each day standing waist-deep in chilly, dirty Pacific sea water, many cast members came down with colds, flu or kidney infections. Several left rather than endure the rigorous conditions any longer. Three stuntmen suffered broken bones. The local Screen Actors Guild (SAG) representative fired off repeated complaints of mistreatment, although a SAG investigation determined there was nothing inherently unsafe about the set. Kate Winslet, who starred opposite Leonardo DiCaprio, was so shell-shocked by the experience - she called it an "ordeal" - that she told one interviewer before the film even came out that she would not work with Cameron again unless it was "for a lot of money". She came down with flu after enduring the cold water, almost drowned at one point and suffered numerous other injuries.

"I chipped a small bone in my elbow," she told the Los Angeles Times, "and at one point I had deep bruises all over my arms. I looked like a battered wife." She described several working days that went on as long as 20 hours. Her take on Cameron? "He's a nice guy but the problem was that his vision for the film was as clear as it was," she said. "He has a temper like you wouldn't believe ... As it was, the actors got off lightly. I think Jim knew he couldn't shout at us the way he did to his crew because our performances would be no good." Cameron himself has never apologised for running his sets like a military campaign, although he has taken issue with several of the more specific accusations against him. "I'm demanding, and I'm demanding on my crew," he once said. "In terms of being kind of militaresque, I think there's an element of that in dealing with thousands of extras and big logistics and keeping people safe. I think you have to have a fairly strict methodology in dealing with large numbers of people."

His supporters - and he does have some, especially actresses such as Sigourney Weaver and Jamie Lee Curtis whose careers owe a lot to his films - argue that Cameron himself takes as many risks as his casts and crews. "He really does want us to risk our lives and limbs for the shot but he doesn't mind risking his own," Weaver once said. "What else could you expect from a guy who grabs the tails of sharks for sport?"

The difference, of course, is one of compensation. While Cameron earned a reported $115m from Titanic and gave himself the luxury of several years' downtime, most of his crew members had to turn right around from the experience and work another job to keep feeding their families.

Now, though, Cameron is back. He hasn't been entirely idle over the past decade, shooting a handful of seafaring documentaries and shepherding the short-lived television series Dark Angel.

In the feature film arena, though, he has struggled to get his projects off the ground. Until 2005, he tried and failed to get funding for Battle Angel, a futuristic fantasy about a female fighter cyborg from the 26th century. Since then, he has been devoting his energies to Avatar, a film that aims to give unprecedented realism to entire computer-generated worlds through the story of a paralysed former marine who creates an alien alter-ego for himself as part of an interplanetary war between humans and aliens.

Cameron first came up with the concept of Avatar a decade ago but realised he needed to wait for film technology to catch up with his vision. When he first pitched the film in 2005, he estimated it would cost $350m- a figure Hollywood simply couldn't swallow, even coming from the man who grossed $1.8bn for Titanic.

Now the budget is down - at least theoretically - to $200m, and Fox just gave him the green light for a tentative release date of summer 2009. Avatar will rely heavily on a technique known as motion-capture technology, in which live actors play the parts of characters who are then animated with computer imagery.

Peter Jackson used motion-capture technology, along with the actor Andy Serkis, to create Gollum in the Lord of the Rings trilogy. The children's film Polar Express did something similar with Tom Hanks. For Avatar, Cameron has actually invented a new kind of camera which will enable him to see the computer-generated character through the lens even as he is filming the actors.

The hope, naturally, is that Cameron will, once again, push the limits of film technology and stun audiences with something they have never seen before. But the fear, of course, is that $200m could easily turn into $400m, and Fox could end up with another public relations nightmare on its hands.

Cameron himself suggested he was keenly aware of those fears as the Avatar project was announced earlier this week. "I've looked long and hard at Titanic, and other effects-related things I've done, where they've drifted budgetwise," he told the New York Times. "This has been designed from the ground up to avoid those pitfalls. Will we have other pitfalls? Yes, probably."

Cameron, like Werner Herzog and the Apocalypse Now-era Francis Coppola, is a classic movie-world obsessive. In other words, the sense of wonder his films generate is in direct proportion to the degree of hell he creates on his sets. He has always been singularly driven, right from the time he was doing second-unit work on cheap Roger Corman horror productions and found a way for the maggots in a dismembered arm to wriggle on camera. (He gave them a jolt of electrical current.) The first Terminator film sprang from a dream he had on a low-budget film set in Rome, in which a menacing robot came out of the future and threatened to kill him.

The second Terminator film, a bit like Avatar, was based on a technological idea whose time needed several years to come - the notion of a liquid metal cyborg that could melt into different shapes, freeze, shatter and reconstitute itself.

Titanic was the product of his enduring fascination with the ocean, as well as his recurrent brooding on the relationship between man and the machines men build. That relationship is an apt metaphor for how he manages his sets and makes his films - he, like his characters, often battles to master technology to ensure that technology does not master him. "People call me a perfectionist," he once said, "but I'm not. I'm a rightist. I do something until it's right, and then move on to the next thing."