Nobody would be surprised to learn that Hollywood prizes the pursuit of profit above the adherence to principles.

Anxious studio executives are currently doing everything they can to flatter the sensibilities of a China that is poised to become the biggest single market for movie consumption. We can confidently predict the disappearance of Chinese villains from Hollywood blockbusters and the suppression of any scripts that make critical references to the country's past.

What is truly shocking about The Collaboration is that a very similar policy was extended to Nazi Germany in the 1930s. Impeccably researched and impressively argued, Ben Urwand's gripping volume systematically reveals the way major Hollywood studios were willing to protect their financial interests in the German market by appeasing the Nazi regime. Urwand has unearthed remarkable evidence from archives in Germany and America, confirming that the road to hell was paved with a thousand concessions. Hollywood studios went to astonishing lengths not to offend or upset the Nazi regime. What began with minor adjustments to scripts eventually reached a point where projects that were unsympathetic to Germany's past or critical of the Nazis were simply never made. In the 1930s, Jewish characters and Jewish subject matter virtually disappeared from American screens as it was felt the best way to tackle the tricky matter of virulent anti-Semitism was to make it disappear. The studios didn't just follow a policy of accommodation they became willing partners with the Nazis to reach an understanding of what could be mutually beneficial to both parties.

The book is such a revelation because it goes against the grain of commonly held assumptions. Our image of Hollywood's wartime propaganda efforts is defined by Errol Flynn single-handedly winning decisive skirmishes, Greer Garson keeping the home fires burning in Mrs Miniver and Humphrey Bogart nobly sacrificing personal happiness with Ingrid Bergman for the greater cause of victory. Urwand admits that once America entered the Second World War in 1941, every rousing entertainment became a Trojan Horse of propaganda. He quotes William De Mille as cynically admitting: "With all hope of profit gone, we can, at last, become properly indignant and raise our voices in shocked protest, without any pecuniary regrets."

What happened before 1941 is an entirely different matter. Urwand is particularly good at marshalling hard facts and solid evidence that builds into a horrifying indictment of studios that continued to operate in Germany throughout the first eight years of Hitler's rule. Germany had once been the second biggest export market for Hollywood films. Hitler was a film enthusiast who was said to watch a movie every night before retiring. He loved Laurel And Hardy, thrilled to King Kong and adored Greta Garbo in Camille. He appreciated the superior craft of Hollywood filmmaking but also recognised the value of the medium as a vehicle for propaganda. That was why the Nazi regime deemed it so important to exert influence over what was depicted in American films, successfully threatening economic reprisals at the merest hint of something that could be considered detrimental to German prestige. German diplomat George Gyssling became a familiar figure in Los Angeles, working at the heart of Hollywood to protect German interests by pointing out scripts and films that were unlikely to win the approval of his superiors.

Even as the full horrors of the Nazi regime became apparent to the world, Hollywood continued to offer the hand of collaboration, a fact all the more ironic considering that many of the studio bosses were Jewish. Urwand details how an anti-Hitler film, Mad Dog of Europe, was abandoned and the way a screen version of Sinclair Lewis's celebrated anti-fascist novel It Can't Happen Here was suppressed. The book is filled with fascinating detail from the films that Germany did ban, including The Merry Widow and Blonde Venus, to a blacklist of 60 personalities whose mere involvement in a film would ensure it being banned. The illustrious but unlikely names included Bing Crosby, James Cagney and Ernest Hemingway.

Urwand is also to be commended for retaining a sense of the bigger picture, especially in detailing the sustained and callous disregard for the plight of Jewish citizens across Europe, even when the system of collaboration started to fall apart from 1939. This is a book that challenges every rose-tinted view of Hollywood's Golden Age. It sheds a piercing light on dark deeds and is an invaluable work of political history that has all the page-turning urgency of a thriller.