So ends a perplexing year for British cinema. It felt like a bad one, with production slumping and companies closing. But there’s plenty of evidence to argue otherwise.

British movies dominated Europe’s major festivals in 2002, winning top prizes at Berlin and Venice and showing strongly at Cannes. Seven Brit pics grossed more than £10 million ($16 million) at the U.K. box office, the local equivalent of breaking the $100 million barrier Stateside. That has never happened before. Previous best was five in 2000, and last year there were only two. Moreover, 14 British films took more than £2 million ($3.2 million), vs. seven in 2001.

There’s a catch, of course. The big seven include “Harry Potter and the Chamber of Secrets” (No. 1 with $75 million so far) and “Harry Potter and the Philosopher’s Stone” (sneaking in at seventh with $16.5 million of its $106 million total earned in 2002), both from Warners.

In second place was James Bond movie “Die Another Day” (MGM/Fox, $48 million), followed by “About a Boy” (Universal/UIP, $27 million), Robert Altman’s “Gosford Park” (Entertainment, $19.6 million), “Bend It Like Beckham” (Helkon SK, $18.5 million) and “Ali G Indahouse” (U/UIP, $16.5 million).

Some would claim six of these seven aren’t British at all, with only “Bend It Like Beckham” qualifying both creatively and financially. It’s certainly true that most of the year’s big Brit hits have been made with Hollywood coin, and often with American talent.

That story continues down the box office list, with “The Guru” (U/UIP, $10.4 million), “28 Days Later” (Fox, $9.6 million), “Iris” (Miramax/BVI, $6.4 million), “The Importance of Being Earnest” (Miramax/BVI, $5.4 million), “My Little Eye” (U/Momentum, $4.3 million) and “The Mean Machine” (Par/UIP, $3.6 million in 2002 out of $7.2 million overall).

Even the indie “Dog Soldiers” (Pathe, $3.3 million), 14th on the Brit list, came from L.A.-based Kismet Entertainment.

So strike out Hollywood and there’s not much left to celebrate. But it’s a failing of the U.K. film community that it likes to define away its hits and cling to its flops. Most of these movies were substantially developed and produced in the U.K., and all drew heavily on British talent and material.

What’s clear from 2002 is that there is no possibility of creating a “sustainable” British film industry (to borrow from the Film Council’s mission statement) without the active participation of Hollywood.

And the more involved the studios are, the more successful British cinema is likely to be, both at home and abroad.

The problem is not that so many Anglo-Hollywood movies are working, but that so little else is.

The artistic success of the year’s Brit fest hits was not matched by their box office results. All, with one exception, fell significantly short of even their own narrow arthouse expectations.

“Bloody Sunday,” a winner at Berlin and Sundance, scraped up just $8,000, victim of the fact that its theatrical release was simultaneous with its TV premiere.

Ken Loach’s “Sweet Sixteen,” a script prize winner at Cannes, managed $1.3 million, largely thanks to its takings in Scotland, but producer Rebecca O’Brien confesses she had hoped to top the $1.6 million of Loach’s previous “My Name Is Joe.”

Of the other Cannes entries, great jokes and great music couldn’t stop Michael Winterbottom’s “24 Hour Party People” from stalling at $1.6 million. Mike Leigh’s “All or Nothing” struggled to $1 million — “very disappointing,” in the words of producer Simon Channing Williams. Ominously for Leigh, the film was stillborn in the U.S. and France, the two countries that have bankrolled his movies for many years.

Lynne Ramsay’s “Morvern Callar” earned $540,000, less than her debut “Ratcatcher,” which took $700,000 and cost half as much to make. Shane Meadows failed in his attempt to find a wider audience with “Once Upon a Time in the Midlands,” which grossed $790,000. Francesca Joseph’s “Tomorrow La Scala!” didn’t even get a theatrical release because the producers couldn’t clear music rights.

“The Magdalene Sisters,” Peter Mullan’s Golden Lion winner at Venice, provides the one bright spot. After a strong run in Italy, it has so far taken $1.2 million in Ireland alone, with its full U.K. release yet to come. But Stephen Frears’ “Dirty Pretty Things,” which won critical plaudits in Venice though no prizes, has stumbled to a lame $540,000.

The arthouse audience for British filmmaking seems to be collapsing, except on the Celtic fringes, even as the multiplex audience is swelling for Anglo-Hollywood fare. Perplexing? More like downright schizophrenic.

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