MONTREAL — Serge Losique fought the law and Losique won.

Canuck film agency Telefilm Canada had pulled all its funding for Losique’s Montreal World Film Festival for the past three years, and most of the other federal and provincial government departments and agencies followed suit. They tried to starve Losique’s fest into submission.

But three years after the bitter battle began, Telefilm rather sheepishly put out a laconic press release Oct. 1 noting it had reached an agreement with the World Film Festival and would be giving the Canuck fest $249,000 to help pay the bills for the 31st edition, which took place in late August/early September. It was a high-stakes game of chicken between the public funder and Losique, and it appears the government bureaucrats blinked first.

“(Serge Losique) is stronger than everyone in this town put together,” says Michele Laroche, head of theatrical distribution at Montreal-based Equinoxe Films. “I’m impressed.”

For two consecutive editions, in 2005 and 2006, the Montreal fest had almost no public funding, and many assumed it would not be able to survive without the such coin. But Losique and his longtime veepee, Daniele Cauchard, somehow managed to keep the ship afloat, and many of the government funders returned for this summer’s edition.

But not Telefilm. The federal agency had led the charge to shutter Losique’s fest. It created a rival event and appeared reluctant to give up the fight. Telefilm execs went to battle with the festival because they had issues with what they saw as Losique’s high-handed management style and lack of accountability.

Telefilm helped create the ill-fated New Montreal FilmFest, which went belly-up after one disastrous edition in fall 2005.

Then Losique’s festival sued Telefilm for $2.5 million, saying the agency was deliberately damaging the fest’s reputation and had no right to create a rival film festival in Montreal. The fest quietly dropped the lawsuit earlier this year.

Telefilm topper Wayne Clarkson turned down a request to explain why his agency went from attacking the World Film Festival to suddenly agreeing to fund it once again. In the press release, Telefilm said it reached a deal with the festival partly because the event would be implementing new “measures to enhance corporate governance and strengthen financial controls.”

Fest veepee Cauchard says the festival has not implemented any such measures and has no plans to do so.

“They have to say something,” Cauchard says. “I still don’t understand these people. We never met Wayne Clarkson. We met (government) ministers but not him. We have the obligation of giving financial statements, but we always did that. You can’t get grants without financial statements from an outside auditor.”

Quebec film agency Sodec helped fund the summer’s edition of the festival, and Sodec topper Jean-Guy Chaput has made a public mea culpa.

But the Telefilm execs have never admitted there were any problems in the way the agency handled the Montreal World Film Festival.

“At least (the Sodec execs) said they made mistakes,” Cauchard says. “That’s more than Telefilm did. What’s amazing with bureaucrats is that they can make mistakes and they’re never accountable for anything. And they have a lot of power.”

Losique has been outspoken in his criticism of Telefilm during this lengthy dust-up, but he refused public comment following the announcement of the agreement with Telefilm, indicating he’d like to turn the page.

Many employees who worked on the summer’s edition of the festival have yet to be paid as a result of the financial problems, but the fest is in the process of doing so now, Cauchard says.