The U.K. government has severed an important link between the British film industry and the rest of Europe by pulling out of Eurimages, the Council of Europe’s co-produc-tion body.

The decision has drawn universal criticism from British producers, who angrily accused the government of failing to understand the way the industry works, and of isolating the U.K. from financing sources on the continent.

During the past three years, the British government has contributed $8.5 million to the Strasbourg, France-based Eurimages fund, and in return Eurimages has invested $19 million in films with British co-producers. According to industry estimates, that generated $60 million of production activity by British producers.

“This is very bad for British producers,” says Eurimages director Barrie Ellis-Jones. “A lot of the growth of British production in the last couple of years has been European co-production. But if you’re not in the club, no one else will want to play with you, and I don’t think this government understands that.”

The Dept. of National Heritage says every department had been forced to make cuts as part of the government’s annual budget, announced Nov. 29. The DNH also cut funding to the British Film Institute by 3%.

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