In the 1980s, director Mike Figgis filmed Stormy Monday in his home city of Newcastle. He tells Steve Pratt how the movie lived up to its name and very nearly didn't get made.

Mike FIGGIS knows more than most film-makers just how precarious the world of movie financing can be. He was unexpectedly free to chat about the DVD release of his first movie, Stormy Monday, which was made in Newcastle, as the film he was planning had collapsed two weeks before shooting began.

The project, The Nazi Officer's Wife, came to a halt when the finances fell apart as he was in Prague doing pre-production work. "I think the film has gone for good," he says.

"So many films are made and it's so competitive that once a film goes down, everyone gets nervous about why it went down and it becomes more difficult to finance."

His feature film directorial debut, Stormy Monday, very nearly didn't get made either. There were several false starts before cameras finally began rolling in Newcastle, where Figgis grew up, nearly 20 years ago.

Since then, the film-maker has enjoyed success with US movies such as Leaving Las Vegas - which won Nicolas Cage an Oscar and Figgis a best director nomination - and Internal Affairs with Richard Gere, as well as experimenting with new technology in Hotel and Time Code.

Stormy Monday, with its story of US gangsters muscling in on the redevelopment of Newcastle, holds a special place in his heart. Not least, I suspect, because it was so difficult to get made despite being planned in the wake of The House, a successful TV film he made for C4. "Stormy Monday was revived from the dead several times," he says.

"It was in development with David Puttnam's company and that never happened. Then it was picked up and announced in Cannes by Hemdale. We waited for a week in Los Angeles for meetings, then flew back with our tails between our legs and the film collapsed.

"Six or seven weeks later a company called Atlantic Releasing became interested. I was given their number and told to give them a call. I remember calling them from a pay phone in a bed and breakfast place in Cumbria with a herd of sheep outside being brought in.

"But they did make the film. It's really difficult making films and the reality is it takes a long time."

Looking at Stormy Monday again today is strange because this is Newcastle before the city was made over and redeveloped into the vibrant, stylish place it is today.

For a first film, Figgis gathered an impressive cast, led by Americans Melanie Griffith and Tommy Lee Jones, with Geordie lad Sting as a Quayside jazz club owner and an up-and-coming actor called Sean Bean alongside them.

Figgis has recorded a director's commentary for the DVD release. "I don't watch my films normally. The only time is if I'm doing a commentary or catch them on cable," he says.

"It was really good fun because it was my first film and a home movie in a way because my family are all in it. My hands are shown making a bomb. My mother's in it and I remember her p***ing off the director of photography because she closed a window as it was draughty and spoilt the shot.

"It's a big deal because it's my home town. A lot of it wasn't autobiographical, but some was motivated by things that had happened to me or urban myths I'd heard, and I was a jazz fan. So it was fun to watch it."

The film was shot before the redevelopment of the Quayside, with Figgis turning a derelict building in The Side into the story's Key Club, and a restaurant in Dean Street into a bar. The Tyne Bridge literally looms large over the action, with the final confrontation between Sting and Jones taking place on the High Level Bridge at dawn. The Royal Station Hotel and the MetroCentre also have key roles to play in the movie. Until then, only Get Carter had exploited the city to full cinematic effect.

Much of what Figgis wrote into his script about the changing face of Newcastle has come to pass. "There was nothing happening down The Side then. The club scene wasn't there. Now every place I used has become a restaurant or a club," he says.

He was interested in bringing US actors to the city which he always regarded as "very American". Others took a different view. "I remember getting a very unkind review saying this was a calling card for Hollywood, but nothing was further from my mind," he recalls. "I ended up going to LA because I couldn't get arrested over here. The film got good reviews in America and the good reception helped launch my career there."

He embraced the digital revolution long before others came round to that way of thinking. Six years ago when he predicted that his film Time Code could revolutionise film and film-making as we know it, his views made front page news in the New York Times. Now he reads recently in a trade magazine exactly what he's been saying for years.

One reason he likes the Super 16 process, with which he's shot three movies, is that it helps keep budgets down. Past clashes with Hollywood studios have taught him that the bigger the budget, the bigger the interference.

"I'll do anything to hold the budget down because the moment you spend more than a certain amount of somebody's money, they feel they have the right to tell you how to make the film and that's something I've never been interested in," he says.

His most famous clash concerned Mr Jones with Richard Gere, who'd starred in his thriller Internal Affairs, as a manic depressive. The studio took the film away from Figgis, hired another director to film reshoots and make it more upbeat.

He had an early example of Hollywood interference when casting Stormy Monday when it came down to a choice between Tim Roth or Sean Bean. Melanie Griffith's management vetoed Roth. "He wasn't a conventional Hollywood good-looking male," says Figgis. "We were faxing photographs to America for their approval."

The Nazi Officer's Wife project may have collapsed but he's already thinking of a replacement. He has an idea for a low budget film - "an original kind of British thriller that's not Lock Stock And Two Smoking Barrels, that gets out of that genre and shows London and Britain in the way it should be shown, as culturally diverse".

With his brother and sister still living in Newcastle and relatives in Carlisle, he's often back in the North-East where, as a youth, he played in the local band The Gas Board with Bryan Ferry. He has links with the Tyneside Cinema, where he saw his first art house movies and whose digital lounge is named after him.

Making another movie in the city "will happen sooner or later", he says. "I wasn't born in Newcastle and didn't get there until I was ten, but it's the place I think of as my spiritual home. That and Northumberland. I always say you drive up the Californian coast to Big Sur and it looks just like Northumberland."

* Stormy Monday (15) is released on sale by Optimum Home Entertainment, £15.99.