Film4 has announced a boost to its film division's budget with renewede spending already being planned.

New films involving Danny Boyle, Keira Knightley and Carey Mulligan are already in the pipeline.

Film4 will have its budget boosted to £10 million from this year, a 20 per cent spending increase on film development and financing in 2009.

The decision returns Film4's budget to its 2007 level before the recession, and partly reflects a cautious confidence in the group.

Film4 has joined forces again with Danny Boyle, the Oscar-winning director of Slumdog Millionaire, on his new film, 127 Hours, based on the true-life ordeal of Aron Ralston, the mountaineer forced to amputate his own arm after getting trapped.

Keira Knightley and Carey Mulligan will also star in Never Let Me Go, based on Kazuo Ishiguro's acclaimed novel of the same name.

The love story following the lives of three children, Kathy, Tommy and Ruth, who spend their childhood at Hailsham, a seemingly idyllic English boarding school.

Filming is also under way on the Red Riding star Paddy Considine's feature debut Tyrannosaur, a story of a man plagued by violence and a rage that is driving him to self-destruction.

Tessa Ross, controller of Film4 and Channel 4 drama, said:"To be able to commit an extra £2 million each year to filmmakers and to work that we care about gives us all great hope for the future."

(LB/BMcC)