New York City may lose its much-touted police unit specializing in film location shoots, insiders said, which would be a blow to the city, which uses the police as a selling point.

Called the Motion Picture & Television Unit of the New York Police Dept., the squad consists of about 27 officers specially trained in crowd management, traffic coordination and the finer points of location shoots. The service is offered free of charge to location units.

But recent cost-cutting measures within the police department, including a reduction in overtime, could extend to the police department’s movie unit, as it’s commonly called. Industry buzz has the unit either disbanding or being drastically reduced in size. The location chores apparently would be handled by regular beat officers. It is not known whether the action would result in layoffs or merely reassignments.

City film commish Pat Scott said her understanding is that any move would be more of an administrative shuffle, or an attempt to put more cops on the street. She’s convinced there will still be some kind of movie unit, which she feels is crucially important to filmmakers, particularly with a dramatic increase in TV and movie activity.

While, for the policemen, working the movie or TV detail is considered a desirable assignment, industryites say their experience in crowd control and difficult logistical problems make then an asset. Managing the location lensings is “a real skill,” said an industry insider. “This will be a disaster for the business.” The change would come at a time when New York lensing is booming, with movie and TV shoots at the highest levels in years. In a brochure package distributed by the Mayor’s Office of Film, Theater & Broadcasting, the movie unit is cited as a benefit of lensing in the city.

A similar move was once explored by former Mayor David Dinkins, who considered using Department of Transporation personnel to police sets. An industry outcry helped beat down that suggestion. Said former city commish Richard Brick: “Those who’ve worked with that unit know they’re pros and specialists. They are one of the major advantages of shooting in New York. Producers get something here that exists nowhere else, free, helpful cops. Its importance goes far beyond the dollars involved.”

Lt. Milton Maldonado, who heads the unit, declined comment.