There are several guests on the 2007 Oscar short list who I suspect would murder for a prize. One of them is Martin Scorsese, up for Best Picture and Best Director for his ferocious thriller, The Departed. This is not Scorsese’s most distinguished film, but it’s his best shot at an Oscar since Raging Bull in 1980.

The American Academy is aching to do right by Scorsese. The venerable members are eager to plug the only significant hole left in his glittering career. But fickle fortune keeps twisting the statue out of the pint-sized maestro’s hands. Clint Eastwood has cruelly thwarted him in recent years, and could yet do so again with Letters from Iwo Jima, the companion piece to Flags of Our Fathers, shot entirely in Japanese.

The odds look considerably healthier for Scorsese this time, though, because Iwo Jima is by far the weaker of Eastwood’s twins, and a sub-titled film has yet to break the Best Picture glass ceiling.

Maybe not for long, though. One mighty exotic shark in this category which aims to do just that is Alejandro González Iñárritu’s Babel, in pole position for the Oscar after winning the Golden Globe for Best Feature. This stunning piece of cinema hinges on one reckless moment of childish stupidity, and rattles alarmingly between characters and crises on three continents.

But even Babel can’t match the impact made on this year’s Oscar nominations by our own dear Queen. The shocking failure of the Royal Family to respond to the sudden death of Diana, Princess of Wales, has taken the awards by storm. The Queen is up for Best Film, Best Director (Stephen Frears), Best Screenplay (Peter Morgan) and Best Actress (Helen Mirren). Frears was rudely pulled out of his lunch at the South Bank Show Awards within seconds of the nominations announcement to register his total bemusement to an overwhelmed BBC reporter. Is the British film industry finally on the march? It genuinely appears so.

The list is littered with British nominations in almost every major category. Paul Greengrass is up for Best Director for his harrowing reconstruction of the 9/11 events on board United 93. Peter O’Toole has a Best Actor nomination for his performance in Roger Michell’s Venus. And there is a right royal scrap between Helen Mirren (the hot favourite), Judi Dench (Notes on a Scandal) and Kate Winslet (Little Children) for the Best Actress Oscar. It’s rare to see Penélope Cruz (Volver) and Meryl Streep (The Devil Wears Prada) looking like rank outsiders.

Scattered elsewhere are nominations for Children of Men (Editing, Cinematography) and Borat (Adapted Screenplay — God knows how they worked that out).

In the four blue-ribbon Oscar categories (Film, Director, Actor, Actress), the Americans have nine contenders out of a possible 20. The Brits have an unprecedented seven, only three fewer nominees than they’ve fielded for the equivalent awards at the Baftas. It’s a statistic that brings tears to the eyes.

It’s normally considered a vintage year for the British film industry if we can scrape together four Oscar nominations for the also-ran awards. To demonstrate just how tight it is, the only American you wouldn’t bet against is Forest Whitaker for Best Actor in The Last King of Scotland. He stands head and shoulders above Leonardo DiCaprio (Blood Diamond), Ryan Gosling (Half Nelson), Will Smith (The Pursuit of Happyness) and O’Toole.

As ever, it’s the films and performances that failed to win approval that are most revealing about Oscar’s state of mind. There is no room for Daniel Craig’s gritty Bond in Casino Royale. Mel Gibson clearly hasn’t eaten enough humble pie for his anti-Semite outburst because his Mayan abattoir epic, Apocalypto, is restricted to the minor leagues of Make-up, Sound and Sound Editing.

Mark Wahlberg pips Jack Nicholson to a Supporting Role nomination for The Departed even if Eddie Murphy looks like winning it for Dreamgirls. And Emilio Estevez’s political hit, Bobby, failed to register a single blip on the radar. Indeed, apart from rare exceptions such as United 93, there is a discernible retreat from politically challenging pictures and an almost whimsical hankering for old-fashioned values and well-turned dramas.

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