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Warner Bros' purchase of Leavesden Film Studios in Hertfordshire is a big deal. It's a big deal for Warner Bros; it has committed to spend over Β£100m expanding and updating the facility which, when completed in 2012, it predicts will sustain around 1,800 jobs and rival any in the world.

It's also a big deal for the UK film industry. Warner Bros' second home near Watford is being seen as vote of confidence from a major Hollywood player in the skills of all those involved in film-making in Britain. It also provides a pointer to its future intent: more blockbusters must surely be coming our way.

David Heyman, the producer of the Harry Potter films, knows the American studio well. He's the guy who, along with colleagues, spotted the film-star potential of JK Rowling's young wizard. Warner Bros funded his vision and the Potter franchise has gone on to become the world's most successful, taking around Β£3.5bn.

Potter's box-office magic has worked for myriad support businesses around the film's UK production base, from the local taxi firms near the studio to high-end visual-effects companies in Soho.

Paul Franklin is the CGI whizz and co-founder of Double Negative, the London-based visual-effects company that is behind much of the on-screen wizardry that Harry and his chums rely on. He told me that without Warner Bros' decision to base HP in the UK, the British visual-effects industry would still be getting by adding sparkle to commercials for household cleaners and fixing the odd frame or two on the occasional mid-budget movie.

Instead, London has become a world centre for CGI and post-production. A-list blockbusters are constantly rolling into town as ideas and out again as fully-realised, freshly-minted hits. Franklin reckons London alone accounts for 20% of the global CGI market, his company sitting at the top table with the very best in the world. He says that Warners' decision 10 years ago has helped British-based companies like his to develop the skills, software and contacts that would previously have been inconceivable.

He notes that if you walk into your local multiplex the chances are at least one of the movies will be substantially made in Britain. He alone has recently worked on Kick Ass, Harry Potter and Inception.

He showed me the CGI scene in Inception where a Parisian street folds in on itself; he then explained how the three-minute shot required three years, 100 people and a large team of photographers filing over half a million digital images. A huge investment for just 180 seconds?

Not really, says Franklin, when such a scene is the movie's "signature moment", defining in a few seconds of an advertisement the film's scale, ambition, quality and imagination to a public spoilt for choice.

The growth in the British visual-effects market has been between steady and dramatic. At the moment, Franklin says his company is full-to-bursting with major Hollywood blockbusters but has fewer smaller-budget films, a situation he puts down in part to the recent global recession.

, I asked Franklin if he would ever turn his hand to directing as Harryhausen had done. Yes, he said, it was an idea that interested him. But he then made an interesting remark about British screenwriters.

They have yet to truly embrace CGI, he said: they still think it's there to fix problems and, if you're feeling terribly vulgar, specifically for a few shots. But few are constructing whole scripts around the technology.

This is unlike their Hollywood cousins who greedily indulge their imaginations knowing that CGI can turn even the most bizarre fantasy into cinematic reality. Franklin says the Brits have a habit - or a taste - for thinking around the European traditions of social realism and auteur movies. He wasn't suggesting that we should import American culture wholesale, or denigrating the current culture, but he sees an opportunity to build on what we have.

So perhaps the UK film industry could be an even bigger player in the global movie business. With CGI specialists becoming directors, with digital screens potentially reducing the dominance of American companies in distribution and with a domestic infrastructure of production companies and skilled technicians who are already among the world's best, this could be the next stage.

There is the issue of finding and retaining the talent. I was surprised how relatively little a senior CGI expert gets paid - more Hounslow than Hollywood - and Franklin said that the restrictions placed by the government on hiring large numbers of non-EU staff makes scaling-up difficult. Employing 50 programmers from Tokyo or California can be done - the points system favours such specialists - but it is a hurdle that must be overcome.

Barry Meyer, the Chairman and Chief Executive of Warner Bros, appeared genuinely excited about the Leavesden purchase when I met him yesterday. His high opinion of British film-making talent - in which he includes videogame companies and television production - was heartfelt.

But it is called a movie business for a reason: when the wrap party is over, the accountants count the cost. Sure, we may be good at stuff, speak the right language and make a decent cup of coffee. But that's not why the bean-counters really love us: it's because we're cheap.

The government gives foreign film-makers and studios attractive tax breaks to encourage them here. According to the UK Film Council, with the current favourable exchange rate and flexible working practices, it is now cheaper to make a film in Watford than in Hollywood.

This is an advantage, of course. But what has happened over the last 10 years is that the UK film business has taken that advantage and built a sizeable industry. By the end of this year, inward investment from foreign film-makers will be near to Β£1bn. And who do we have to thank? Well, Warner Bros for sure: it was Warners' lead that others followed and that has helped build the infrastructure and skills base Britain currently boasts.

And then there's David Heyman, the British producer of the Harry Potter films, who steered the project with such skill. But behind it all lays an unsung hero: somebody who put her foot down and insisted that if there were to be a Harry Potter film, it would be made in the UK.

So, who is this champion of the British movie business? Step forward JK Rowling.