Variety’s analysis suggests that the U.K. Film Council’s $1.6 million lottery investment in “The King’s Speech” could ultimately recoup $15 million-$20 million, based on an estimated $300 million-plus gross and an estimated 33% share of profits.

By comparison, Film4 had an equity stake of about 10% in “Slumdog Millionaire,” and is understood to have netted profits so far in the low- to mid-seven figures from its worldwide gross of $338 million.

The U.K. government’s controversial decision to abolish the Film Council means the “King’s Speech” profits will flow back into the coffers of the British Film Institute, which is taking over the council’s old lottery funding duties in April.

With bitter irony, the predicted profits virtually match the £11 million ($18 million) administrative cost of shutting down the council.

Because “The King’s Speech” was backed in 2009 by Sally Caplan’s Premiere Fund, its earnings are not contractually earmarked to be re-invested directly into new films, as they would have been if the project had been backed a year later by the UKFC’s restructured Film Fund under Tanya Seghatchian. This replaced the Premiere Fund in April 2010 with a formal commitment to invest all its recouped revenue back into development and production.

As a consequence, the BFI will be free to use its “King’s Speech” bonus to fund its overhead or any other activities it sees fit. That practice, of course, is exactly what enraged some producers critical of the UKFC.

Producers argue that the UKFC’s self-feeding recoupment policy was a major factor in its failure to build a sustainable U.K. film industry. Independent producers’ lobbying org Pact is campaigning for a radical change in the way recoupment is handled by public funders. Instead of going back to the funding body, Pact wants the coin to go back to the same producers in a “locked box” for reinvestment in future projects. This would enable producers to build up the asset value of their companies, and leverage other finance.

U.K. Culture minister Ed Vaizey has indicated that this proposal will be considered in the government’s upcoming review of its film strategy, which is set to be taken up in May.

More on ‘King’s Speech’ payday
Who gets the ‘King’s’ ransom? | Slicing ‘King’s’ profit pie | Oscar bling brings ‘King’s’ B.O. bounty | U.K. Film Council had chunk of ‘Speech’