Michael Caine is set to star with Danny DeVito and Kristin Scott Thomas in “The Nature of Enchantment,” for producer Penny Marshall and Mike Newell’s 50 Cannons.

The $18.5 million pic, shooting in September in Montreal, will be the feature debut of musicvid helmer Nick Brandt, from an original script by Stephen Volk. A U.K./Canadian co-prod, the project is being sold internationally by IAC Films.

Mixing psychological drama with fantasy, it’s the story of a feral child found abandoned in New York. Caine plays Dr. Easterman, the aging psychiatrist who discovers that the boy sees the city as a fairytale land — the skyscrapers are a forest; the commuters are gnomes, ogres and witches; and his doctor is a benign troll.

As Easterman’s daughter (Scott Thomas) and colleagues start to fear for his health and sanity, the doctor gets drawn into the boy’s fantasy world. They embark together on an odyssey through the streets of New York to find the source of the child’s trauma, the ogre’s castle.

DeVito plays a recently deceased colleague of Easterman who starts appearing to him in increasingly nightmarish visions. In the end it’s the boy who must go on a mission to save his ailing mentor.

Pic is the first to be financed under IAC’s three-pic deal with Venus Film Co., a new corporate equity investment fund for movies that qualify for U.K. tax breaks. Venus has committed to bankroll a minimum of three IAC films with aggregate budgets of $50 million-$55 million.

“The Nature of Enchantment” will be co-produced by Canada’s Remstar Corp. A North American distribution deal is being finalized.