Fine Line Features is gearing up to wage indie war with Miramax Films and then some.

Recently named Fine Line prexy Ruth Vitale has assembled a staff – mostly of her former acquisitions team at New Line where she was an exec VP – to turn the arty New Line leg into a full-scale producing entity.

“We’re stepping up to the plate,” says Vitale, who has been running pell mell between New York and L.A. in the last few weeks organizing her agenda and convincing agents that Fine Line has money to spend.

Confirms another inside source: “We’ll be much more aggressive out there. We’re in the spec market. We’re buying.”

Vitale maintains that Fine Line will release 10 to 12 pictures per year, producing four to six of those and co-producing the rest. Those pics will carry a range of budgets, possibly going as high as $12 million to $15 million.

“We want to make Fine Line a viable competitive entity in the marketplace,” Vitale said. “To do that we have to broaden our scope and look for material that has more upside commercial potential.”

While running New Line’s acquisitions department, Vitale handled production on such pix as “Corrina, Corrina,” “Safe Passage” and “Don Juan de Marco.”

Sources inside the company say those will be the types of movies Fine Line may pursue, along with a panoply of low-budget production efforts.

A high-ranking exec at another studio, however, wonders whether Fine Line’s new interest in upscale, big-budget pics won’t intrude on New Line’s territory.

“What’s the point of having Fine Line if it’s just going to be like New Line?” the exec says.

But other insiders at the company say this is a natural evolution.

“New Line is going toward more of the genre and high-concept movies, effects-driven pictures,” says one studio source. “We’re really looking at more character, story and filmmaker driven stories.”

Parent company Turner Broadcasting System was reportedly dissatisfied with Fine Line under former president Ira Deutchman. He left to take a production deal with the company.

Insiders say Deutchman’s days were numbered after “Death and the Maiden” and “Mrs. Parker and the Vicious Circle,” both financed by Fine Line, wobbled at the box office.

“No one expects blockbusters out of Fine Line, but there’s no reason it shouldn’t be profitable,” says one studio source.

Other sources say Deutchman was plagued – in New Line’s eyes – by his penchant for pix with dark themes.

But to his credit, Deutchman was responsible for the acquisition of the high school basketball docu “Hoop Dreams,” which Turner has exploited both in marketing and ancillary possibilities.

Although the growth of Miramax provides an obvious impetus for Fine Line’s expansion, Vitale rejects the notion that the Disney-owned arthouse powerhouse is a model for her own division.

“We’re not in the quantity business,” she says. “We’re not going to play that game; it doesn’t make sense. We’re in the business of carefully picking material.”

Currently, Fine Line has “Total Eclipse” in production in Europe; Agnieszka Holland is directing from a script by Christopher Hampton. Pic stars Leonardo DiCaprio.

Another project in development awaiting a script is Robert Altman’s “Angels in America.” The film, based on the hit Broadway play by Tony Kushner, is being written by the playwright.

Vitale stresses that Fine Line is still in the acquisitions business, as evidenced by its recent pickup of “Unzipped” at the Sundance Film Festival. “We’re still in the finished film business. We have every intention of continuing that,” she says.

Fine Line also doesn’t plan to throw around production deal money that readily. “(New Line CEO) Bob Shaye doesn’t like overall deals,” says one source. But the arthouse provider is already linked through deals to Deutchman, director Trevor Nunn and producers Ann Scott and Simon Relph.

Fine Line will continue to be based in New Line’s Gotham headquarters on Seventh Avenue. But for the first time it will open a Los Angeles office run by former New Liner Jami Abell-Venit, who will become VP of production and acquisitions. Amy Labowitz will join her as executive director of production and acquisitions, as will John Barnes as a creative exec.

Vitale will relocate to New York in the spring to join acquisitions and co-productions VP Bob Aaronson and creative exec Anne Hall.

Additionally, Ilene Maisel has been hired as a consultant to Fine Line’s London bureau, which has yet to be staffed.