The death of art house

British directors once made movies as bold as Sebastiane and My Beautiful Laundrette; now they mostl

Nostalgia is not a feeling that the films of Derek Jarman ever seemed likely to engender. In its wit, vitality and, frequently, its pretentiousness, Jarman's work always seemed to address itself to the present. The years have done little to diminish this quality; watched today, the films are no museum pieces. Still, I must confess to feeling envious of anyone planning to watch his films for the first time at the upcoming retrospective at London's Institute of Contemporary Arts. What a treat is in store for them.

Most of the director's major work is here (with the regrettable exception of 1989's War Requiem). The wry, unabashed eroticism of his 1976 feature debut Sebastiane, a loose interpretation of the death of St Sebastian, co-directed with Paul Humfress, will be a tonic to any hearts heavy from the woes of Brokeback Mountain; there is pain in Sebastiane, too, but a good deal of devilish fun, and nothing resembling shame. Jarman's scandalous punk fantasy Jubilee, which made his reputation, still offers a more candid snapshot of 1977-and-all-that than you'll get from downloading old Sex Pistols numbers.

Then there is his masterpiece, Caravaggio, a blissful exercise in fusing an artist's life with his art, equalled in recent cinema only by Paul Schrader's Mishima: a life in four chapters. Narrative is jettisoned in the abrasive collage of The Last of England, while a modern-dress Edward II, complete with placard-wielding OutRage! protesters, laces polemical fury with irreverence. Two of Jarman's most pared-down features, Wittgenstein and Blue, both from 1993, illustrate that a kind of majesty can be achieved through a judicious use of minimalism. Completing the programme are various Super-8 shorts, as well as demented pop videos for musicians whose sensibility overlapped with Jarman's - the Pet Shop Boys, the Smiths, Suede.

And yet, for anyone whose tastes were shaped by these films, the experience of revisiting them has about it the melancholy air of strolling through an old neighbourhood and smarting at the changes. It is not the films that look different now, but the context that made them possible. The temptation to dab the eyes with a handkerchief and declare that "It was all art-house around here when I was a lad" is strong, and should be resisted. However, it remains the case that home-grown cinema has altered beyond recognition since the mid-1980s, when British art-house film-makers had a significant, if embittered, presence in the cultural landscape. Much of this was due to the production wing of the British Film Institute, which provided funding for the likes of Jarman, Terence Davies, Bill Douglas and Peter Greenaway. BFI Production became part of the Film Council in 2000, but a coherent British art-house scene had already vanished by then, and with it a style of film that had not outlived its purpose.

This style might be called austere or intellectual, only that doesn't cover the sense of mischief that is intrinsic to the appeal of Jarman and Greenaway, or the emotional rawness of Davies's pictures, which contrasts so deliciously with his meticulous compositions. Strange to think that an entire new generation of film-goers has no idea what a Terence Davies film might entail, let alone to wonder whether it would care to see one. The National Film Theatre will attempt to remedy this situation with a season later in the year, but Davies himself, out of the director's chair since The House of Mirth six years ago, is only now embarking on his next film, having been stalled by lack of funding. And though Greenaway is still working, only those with long memories will recall a time when he seemed to be everywhere, upsetting everyone - notching up the highest walk-out rate in the history of London's Lumiere Cinema for A Zed and Two Noughts, being pilloried from all sides for The Baby of Macon, or sending Alan Parker into a tizzy simply by existing.

It is unimaginable now that British films of limit-ed commercial appeal could matter that much to anyone; nothing less than unsimulated sex, as in the case of 9 Songs, will sell a UK picture that hasn't been bankrolled by Working Title. This phenomenally successful production company once backed Edward II, My Beautiful Laundrette and Wish You Were Here, but now bets on nothing riskier than Nanny McPhee, Pride and Prejudice and whatever emerges from Richard Curtis's printer. It would be easy, and satisfying, to lay the blame for the gulf between art-house and mainstream production in Britain at the feet of Curtis and Working Title. In his book Shepperton Babylon, Matthew Sweet reports that the Four Weddings writer was harangued by John Maybury, the one-time Jarman collaborator and director of Love Is the Devil, who told him: "It's people like you who've ruined British cinema for people like me." Yet it is the industry, rather than Curtis alone, that continues to conspire against film-makers of originality. Since Four Weddings and The Full Monty proved that British films could compete internationally beyond the territory of costume drama, all energies have been focused on honing the formula until box-office success is virtually built in.

For any director with no interest in following in Billy Elliot's ballet shoes, funding is scarce, and the climate so hostile that there is little chance to experiment and develop as Jarman and Greenaway did. Some, such as Pawel Pawlikowski and the prolific Michael Winterbottom, have been lucky. But most of the great hopes for the future who have emerged in the past decade have yet to put much distance between themselves and the starting blocks. Carine Adler has begun filming her second feature nine years after the release of her debut, Under the Skin. Lynne Ramsay has made two - Ratcatcher and Morvern Callar - in six years. Jamie Thraves has got one, The Low Down, under his belt in five years, while Neil Hunter and Tom Hunsinger, who made the acclaimed Lawless Heart, are only just starting their third feature in ten years.

If Jarman himself had had access to time travel, as Elizabeth I does in Jubilee, he would surely have been pleased to find that his fingerprints are all over international cinema. An entire season could be programmed from those directors who have drawn inspiration from him, whether mainstream (Baz Luhrmann), independent (Jonathan Caouette, John Greyson, Todd Haynes, Guy Maddin, Sally Potter) or avant-garde (Matthew Barney, Patrick Keiller). Yet he might have been surprised to find the same territorial battles being waged in Britain, with less ground being gained than ever before.

Retrospectives usually provide a cause for rejoicing. Let this one be tempered by mourning. Not for Jarman, whose work is alive and whose influence is thriving, but for the late, great and stubbornly individual British art-house movie.

"Derek Jarman: a celebration" runs from 17 February to 2 March at the Institute of Contemporary Arts, The Mall, London SW1. For tickets and further details call: 020 7930 3647