Jon WelchThe future of movie-making in East Anglia hangs in the balance after the collapse of Screen East, a government agency supporting the film industry in the region.Jon Welch

The future of movie-making in East Anglia hangs in the balance after the collapse of Screen East, a government agency supporting the film industry in the region.

Screen East, which has an office at The Forum, in Norwich, is no longer operating because of financial difficulties and its finance manager, Melvin Welton, has been arrested on suspicion of theft.

Laurie Hayward, chief executive, said: 'The directors of Screen East have concluded that the company is insolvent and can't meet its debts as they fall due. The directors have taken advice and appointed an insolvency practitioner to take the company into administration. We've no further comment at this time.'

He confirmed that Mr Welton had been arrested and a police spokesman said: 'Norfolk Constabulary can confirm that a 61-year-old man from Great Yarmouth has been arrested on suspicion of theft and released on bail pending further inquiries.

'As the investigation is in its early stages we are unable to comment further at this time.'

Screen East's remit included promoting the East of England as an ideal location for film and television production, attracting investment by marketing the locations, facilities, skills and expertise available in the region.

The 2008 film Dean Spanley, starring Peter O'Toole and Sam Neill, was among the movies it has invested in.

The film, shot at locations including Peckover House, Wisbech; Holkham Hall; Elveden Hall; and Norwich Cathedral, was the first to receive money from Screen East's �2.25m content investment fund.

The organisation's future was already in jeopardy following the government's decisions to axe the UK Film Council, the primary source of public finding for film-making, and the East of England Development Agency, Screen East's other main financial backer.

But news that it had closed so abruptly was met with shock by Richard Bracewell, the Norwich-based director of feature films The Gigolos and Cuckoo.

He said: 'If Screen East are not currently supporting indigenous film-making in the east, that's a massive shock and a huge shame for all the film-makers working in this area and also the educational and festival projects.

'Budgets are always tight and they have worked tirelessly to keep film making and film heritage alive. The future looks bleak without them, whatever the circumstances of their demise.'

Mr Bracewell said Screen East had helped his projects in several different ways.

'They helped us release The Gigolos in the area,' he said.

'The funding they put in enabled us to take the movie into cinemas that wouldn't have otherwise taken the film.

'It gave people the opportunity to see something other than the usual Hollywood fare.

'They are investors in Cuckoo, our thriller, which is released in the UK in November.

'It was 80pc filmed in the region - in Great Yarmouth and Norwich - and we had a lot of support from Screen East's location team.

'We couldn't have made Cuckoo in the same way, shooting substantially in the region, without Screen East; we would have taken it to London.

'The big worry is that state aid for film will become distributed solely from London, which begs a huge question about the future of film-making in the UK.'