THE Paul McGuinness-backed Ardmore Studios is examining whether the loss of UIP's $70m (€55m) budget blockbuster Dracula to Northern Ireland may have been as a result of unfair state aid.
Ardmore boss Siun Ni Raghallaigh said in Cannes last week: "There was a lot of money flung at it. I'm sure they dotted all the 'i's, but I want to look at it."
The loss of Dracula to the North was seen as a body-blow for the struggling Irish film industry, given that major efforts across a number of agencies had gone into pitching for the movie.
Extensive high-level negotiations with Hollywood studio UIP looked set to bring the big budget movie to Ireland and Ardmore Studios.
The European Commission ruled last year that Spain must recover the €265m of public funding granted by the Valencia Regional Government to the Ciudad de la Luz (City of Light) studio in Alicante in 2000.
A major European investigation into the financing of the facility concluded that the public funding massively distorted competition between major European film studios.
"Survival is the new success and we are surviving. It is difficult and things like this don't help. Ardmore is a national treasure and we are certainly fighting the fight, but we need the support of the Government to level the playing field," said Ni Raghallaigh.
The Irish film industry is facing increased challenges as competition from Northern Ireland and Britain heats up. The Irish Film Board and other agencies had actively been pitching for major TV series to be made here, luring a number of high-profile shows such as The Tudors and Vikings.
However, this strategy has come under threat, with the UK updating its own tax breaks last month and introducing a raft of new measures that will allow Britain to compete directly for productions.
Discussions between the Irish film industry and the Department of Finance, the Revenue and the Department of Arts about updating tax incentives are moving extremely slowly, according to sources.
The key to new proposals for an updated Section 481 incentive is to allow fees paid to American or non-European stars to be permissible as a qualifying expense under the scheme. The so-called Tom Cruise Clause would mean movie productions would be able to get tax relief on talent such as actors, producers and directors. Given existing taxation agreements with the US, it is likely that the State would not be exposed to extra costs from introducing this clause, which is now part of UK tax incentives.
The Government has indicated that it wants to attract bigger budget movies to Ireland as part of its foreign direct investment policy. The loss of Dracula will lead to increased pressure on the Government to bring in new measures.