"This is a great outcome," said France's culture minister Aurelie Filippeti. "A reversal of these principles could have had dramatic effects on our entire film sector."

The EU executive unveiled plans to update the EU's existing twelve-year old rules, extending the scope of government support from the production stage to all phases of film-making, including the cinemas themselves.

Competition commissioner Joaquin Almunia said the rules were "essential to help preserve cultural diversity" and would "take into account the European dimension of the audio-visual sector."

Under the new rules, governments will be allowed to cover 50 percent of the costs of a film from production and script-writing to distribution and promotional costs. Governments will also be able to require that between 50 to 80 percent of subsidised films' budgets must be spent within the country.

Meanwhile, authorities will have a free-hand on how much aid can be awarded to so-called 'difficult' works such as documentaries and non-commercially viable films.

It also includes the possibility of direct aid to cinemas, which Almunia suggested could include money to promote the digitalisation of cinemas.

Between them, EU governments pay out over €3 billion using measures ranging from direct subsidies to tax breaks to the film industry, according to research. The sector employs one million Europeans. It continued to outstrip its rivals Hollywood and Bollywood in 2012, producing 1,299 feature films compared to 817 in the US and 1255 in India.

A national film-industry remains a jealously guarded commodity for other European governments, too.

In a joint statement with UK chancellor George Osborne, the British Film Institute said that the move was a "huge reassurance to the UK film industry," adding that the UK's film sector was responsible for 117,000 jobs.

The multi-billion euro gaming industry was excluded from the remit. A commission paper noted that its "insufficient experience" of the sector meant that it would be "premature" to give it the same status as the audio-visual sector.

"War games are not a cultural product," Almunia told reporters.