GOOD MORNING: “Tell New Line to lay off, we’d appreciate it,” Walter Matthau told me from the Montgomery, Ala., location of “The Grass Harp.” The movie, based on the Truman Capote story, is being directed by Matthau’s son, Charlie. It stars Matthau, Jack Lemmon, Sissy Spacek, Piper Laurie, Roddy McDowall, Edward Furlong, Mary Steenburgen, Nell Carter, Charles Durning and Joe Don Baker. It also boasts cinematographer John Alonzo and production designer Paul Sylbert. But the movie’s in trouble, New Line tells me. This saga started with a phone call from Walter from the location, with hundreds of extras and 1940s cars in the background. Matthau claimed, “They (New Line) are cutting the quality of the film. They are intimidating Charlie. They are cutting days out of the schedule. They (New Line) are on the set and are very destructive. It’s not conducive to making a good movie. We’ve got a fine script, wonderful cast and crew and they (New Line) are fighting us in a cavalier way. It’s like telling Mozart he has too many notes. They want to cut scenes.” Matthau reminded, “Everybody’s working for nothing — the picture is being made for nothing. I’m working for SAG minimum and I’m getting (a quarter) of my usual hotel and food allowance. They are interrupting the whole creative process.” He allows the movie is “not a mass appeal picture but, who knows, it could make $ 40 million”… However, New Line senior VP Ruth Vitale told me, “We’re desperately trying to make a good movie, but it’s so out of control. I wanted to give him (Charlie) the chance to make the best movie, I even delayed post-editing until after filming is completed and have editor Ed Levin and cameraman John Alonzo working on the set trying to help establish scenes (before Charlie shoots them) and do the assembly later,” even though, she said, the delay in post will add costs. The movie will probably cost $ 10 million. “It shouldn’t have been (this expensive), but,” she said, “this is beautiful material and should be a beautiful picture. But he (Charlie) is not making his days (sked). I don’t want to replace him,” she added. “But we have a picture going over budget. I know he understands.” New Line execs head to Montgomery Monday to meet with Charlie and his agent, CAA’s Martin Baum, who allows, “They have the right to implement cost-saving processes, but we will try to get a little more money and time. The stuff that has been shot is excellent, everyone agrees.” Charlie wanted me to know he did not orchestrate the call from his father, who complained about New Line. However, he agreed the appearance by New Line reps on the set and their actions “creates terrible distraction for me and the actors. This movie could be something very special.”

A TOUGH ACT TO FOLLOW: Isabella Rossellini said, “I’m here to break the spell” as she revealed the courage and secrecy of her mother Ingrid Bergman’s valiant and silent battle against cancer. She continued to work (“The Constant Wife, “”Murder on the Orient Express”), going from radiation to rehearsals. After her mastectomy, when the cancer spread during the making of “Golda,” she toiled although her right arm was swollen the width of her body. “She didn’t want to live without acting — it was her antidote,” said her daughter. Rossellini was introduced by Lilly Tartikoff at the Fire & Ice Ball benefiting the Revlon/UCLA Women’s Cancer Research Program, as described here in Wednesday’s column. The 1,200 guests segued from 20th Century Fox’s Stage 14 nonstop fashion show by Giorgio Armani — 300 creations in 30 minutes by 75 models — to the Armani-decorated Stage 15 for the Wolfgang Puck-prepared dinner, tributes to Tartikoff, Ron Perelman, Rupert Murdoch and UCLA’s Dr. Dennis Slamon. Michelle Pfeiffer, who intro’d Armani, was his first Academy Awards “model” in 1989 when he began to change the look of Hollywood. They’ve been friends ever since.

KATHARINE HEPBURN, escorted by her “Lion in Winter” (1968) director Tony Harvey, caught “Show Boat” on B’way this week. In next week’s TV Guide, I lunch with Miss Hepburn and talk about her (final?) appearance in NBC’s Dec. 19 “One Christmas.” She told Swoosie Kurtz the MOW probably marked her last day of acting … Shari Lewis, celebrating her 40th year with Lamb Chop, closes Sunday in her successful one-week musical at B’way’s Richard Rodgers theater, continuing on to the Aloha Bowl. Saul Turteltaub wrote the show — and was Shari’s first boyfriend, she told me. Lewis, with 62 books on the stalls, videos upcoming and her PBS honored show, gets yet another award at the N.Y. Film Fest … Halle Berry and Mario Van Peebles head to D.C. this weekend to co-host the Black Entertainment TV “Yearbook ’94: A Look at Black America,” with stories including O.J. and Michael Jackson, of course.

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