A film studio backed by Sean Connery could be operating in the actor's home city of Edinburgh by 2001, the head of Scottish Screen said yesterday.

A consortium which includes Sony and Scottish businessmen is looking for a site and may be able to conclude a deal by Christmas, according to Mr John Archer, chief executive of the publicly-funded film agency.

He said Connery had been a major factor in the choice of Edinburgh and that executives from Sony, which owns Columbia Pictures, were attracted by Edinburgh's reputation as a cultural centre with a major international festival.

The film studio would bring hundreds of jobs to the city, from security and catering to film technicians and actors.

Scottish Screen has long been trying to attract such a development to Scotland.

Mr Archer dismissed suggestions the plan was an act of ''political revenge'' on Mr Connery's part, aimed at the Government which denied him a knighthood.

He confirmed the actor had held talks with Scottish Screen and the giant Sony Corporation about a multi-million pound investment. He said: ''The interest of Sean Connery and Sony in creating a film studio in Scotland has nothing at all do with politics, although I am sure any investment he makes here in the film industry would be seen as a patriotic gesture.

''It is far too big a financial deal to be an act of political revenge. I think the Government would welcome this kind of investment.''

Mr Archer made his comments after speculation by film industry insiders that the actor became interested in the project after being denied a knighthood because of his outspoken support for the SNP.

The speculation appears to centre on a disclosure earlier this year that the actor, who donates #50,000 a year to the nationalists, had been nominated for the honour but was blocked by Scottish Secretary Donald Dewar from receiving the award.

Talks involving Sony, Connery, and a group of Scottish businessmen and financiers, are understood to have been under way for at least two months.

Scottish Screen, which has actively supported the concept of publicly financed studios at Pacific Quay in Glasgow but has stressed it was open to alternatives, is involved in brokering the studio deal.

The studio would take the dual role of a physical space where films are made and a company that makes films. Estimated building costs are about #10m.

If it proceeds, the studio could make 20 films in its first five years, with Connery starring in some of the releases. Estimates of the cost of the films are conservatively placed at #60m.

Mr Archer yesterday welcomed Connery's initiative. He said it was in line with Scottish Screen's desire to attract Hollywood studios to invest in Scotland: ''Any kind of film development is an investment risk. The more that can be taken on with private rather than public investment, the better.''

However, British film director Alan Parker was dismissive of the idea. Speaking last night at a Directors' Guild of Great Britain event to mark his film-making successes, he said: ''If he (Connery) comes back to England and stops living in Spain, he'll raise somebody's hopes.''

He said all Connery had got was a headline in the newspapers.

Nevertheless, Mr Archer said he believed the studio would help upgrade technical film skills in Scotland and Glasgow's role at the centre of film and broadcasting in Scotland would be complemented rather than damaged by the move.

It is thought the project could be up and running by 2001.