Who's afraid of the Blair Witch?

It is difficult to know who will be more scared - cinema audiences or any Hollywood directors nervously awaiting approval of multi-million dollar budgeted projects. For a new horror movie, described by many as the scariest film in decades, has taken the American box office by storm despite a tiny budget.

The Blair Witch Project, shot in just eight days using unknown actors on a budget of only $35,000, has stunned Hollywood by raking in $28.5 million in its first weekend on release - an astonishing 80,000 per cent profit in two days.

Hollywood commentators now predict that despite the minuscule budget, the movie, which has caused terror among US audiences without the use of gore, could eventually earn $100 million worldwide. The film has now been given a British release date of 29 October.

Like the British hit Lock, Stock and Two Smoking Barrels, the film has dispelled the theory that for big box office success, movie budgets need to run into millions. And although it was the new Julia Roberts-Richard Gere film, Runaway Bride, which swept the US box office this weekend, it was The Blair Witch Project which became the talk of Hollywood after it ran in a close second.

This success came despite the fact that the long-awaited screen reunion of the Pretty Woman stars opened at over 3,000 screens, more than double that of The Blair Witch Project.

The new chiller also proved more attractive to US filmgoers than the latest Samuel L Jackson Jaws-like thriller, Deep Blue Sea, Catherine Zeta Jones' The Haunting and Stanley Kubrick's Eyes Wide Shut. "It has turned the industry on its ear," said Roger Cels, of the trade paper, The Hollywood Reporter.

The mock documentary sees three young film-makers lost in the wilderness while searching for a local witch. The trio are never seen again, but a year later their camcorder footage is found and that is where the horror begins. Shot on video and 16mm film, it has a disturbingly home-movie feel, as the friends begin to turn on each other as they are stalked by seemingly supernatural forces.

Critics say the fear the movie has managed to instill in American audiences has not been seen since the release of The Exorcist some 25 years ago. One US critic explained: "The Blair Witch Project isn't designed to make you jump. It isn't designed to gross you out. The Blair Witch Project is designed to make you fidget, then make you panic, then make you lose a night's sleep. The Blair Witch Project is scary because - unlike factory-produced horror movies - it seems so real."

The movie had originally only been expected to take in around $16 million, but as interest continues to soar, it looks set to break all box office records for a film with such a low budget.

"Our phones have been ringing off the hook from distributors wanting to book it," said Steven Rothenberg of Artisan Films which paid just $1 million for the movie. "Every year there's one film like this that comes out of the blue."