There are two ways to make a British film. Let’s call them the British way and the American way.

The British way ideally involves a gritty character such as Ken Loach, Mike Leigh or Shane Meadows with a story to tell, an indefatigable approach to fundraising and a heroic tolerance of delays, short cuts and disappointments. Nobody doubts their provenance – who but the British would pursue an entire career as a plucky underdog?

Then there is the American way. It does not need a British director (see Chris Weitz for The Golden Compass) or British actors (see Eric Bana, Scarlett Johansson and Natalie Portman in The Other Boleyn Girl) or even the English language (Dhan Dhana Dhan Goal, about a struggling football team in Southall, was made in Hindi with Bollywood stars). It certainly does not require British money.

When this method works, it delivers a polished international product which may on some level reflect the world’s view of Britain, even if it is not a vision familiar to anyone who lives here.

Times Archive, 1943: Alexander Korda on British films

The future of the British film industry depends on its leaders avoiding a grievance against America

• Michael Balcon: British films in the USA

• British films: distribution in the USA

Related Links

• British blockbusters take on the world

• Indiana Jones steals the show

• 'British' films double share of world market

Films officially qualify as British, thus entitling them to a range of tax breaks, in one of two ways. First, there are the co-production agreements. The UK has bilateral co-production treaties with Australia, Canada, France, Jamaica, New Zealand and South Africa and is a signatory to the European Convention on Cinematographic Co-production. Negotiations are under way to establish new treaties with India, China and Morocco.

More notoriously there is the cultural test. This requires the film to score 16 points out of 31 on a questionnaire where having a British director, scriptwriter, producer, composer, lead actors, majority of cast, and a majority of crew score fewer points than being in English and being based on British subject matter. The test, new last year, merely formalises a long-standing relationship between British talent and US money.

The development of television, video, DVD and the internet long ago rendered the idea of an insulated British film industry unsustainable: the commercial market for English-language films is a global one and is naturally dominated by Americans.

Home-grown French, German and Italian films such as Welcome to the Sticks, The Lives of Others and Il Divo hold their own at the local box office partly because their language marks them out as a different type of product from the blockbuster competition.

Hollywood investment in the UK creates jobs and feeds money back to local crew, hospitality and British postproduction. In return the film’s backers can expect a healthy return at the UK box office. The Golden Compass took nearly as much in the UK, where it was a Christmas hit, as the $70 million (£35.4 million) it made in the US, where it was not.

How much does this matter? Not at all, so long as we accept that the revival in “British” film-making is really nothing of the sort. The Harry Potter movies are a British institution but they would not exist without Americans. They are as British as Manchester United and the new generation of German-built Mini Coopers. They are also no more foreign than those classic “British” epics Lawrence of Arabia and Bridge on the River Kwai, made by David Lean with a solid British cast and sackfuls of US studio cash.

Explore Film

• Film Reviews

• Trailers

• DVD

• Oscars

• Cannes

Editor's choice

• U2 at Nou Camp Stadium, Barcelona
• The 50 Best Movie Villains
• The 15 golden rules of theatre etiquette