LONDON — Piper Perabo and Patrick Swayze are in final negotiations to star in “George and the Dragon,” a $32 million pic from the Carousel Picture Co., a Luxembourg-based production outfit.

They will join a cast which already includes James Purefoy (“A Knight’s Tale”) and Michael Clarke Duncan (“The Green Mile”).

Pic, directed and co-written by Carousel co-founder Tom Reeve, is described as an “action-adventure romantic comedy,” set in 12th century Britain. It offers a new twist on the legend of the dragon-slaying knight who became England’s patron saint.

Purefoy plays George and Perabo the princess he’s supposed to rescue from the dragon, but who turns out to have her own ideas. Swayze is in line for the role of Garth, a knight who is betrothed to the princess, and Clarke Duncan will play George’s moorish buddy.

The first phase of principal photography starts Dec. 12 for a week, and then resumes Feb. 4. Shooting will take place at Carousel’s studios in Luxembourg and on location.

Carousel is financing the production with its regular partner ApolloMedia, one of Germany’s most prolific film funds. Together they recently produced and financed Peter Hyams’ “The Musketeer,” Bill Malone’s “FearDotCom” and Christian Duguay’s “The Extremists.”

But “George and the Dragon” is the first large-scale movie to be developed in-house by Carousel.

German film group Das Werk is also investing in the project. Its L.A.-based subsid 310 Entertainment will handle international sales.

Carousel was formed in 1995 by Reeve, an experienced line producer, and his partner Romain Schroeder. It has co-produced 17 films, taking advantage of Luxembourg tax incentives, and now is ramping up its own development slate.

Reeve made his directorial debut earlier this year with “Diggity,” a $3 million family pic starring Andrew McCarthy, financed by Apollo, and being sold by Overseas Filmgroup.

Reeve co-wrote “George and the Dragon” with Michael Burks. Producers are Schroeder and Todd Moyer, with Jan Fantl co-producing.