Former Monty Python animator Terry Gilliam's failure to make The Man Who Killed Don Quixote was laid bare in the documentary Lost In La Mancha. Now, seven years after his last completed movie, Fear And Loathing In Las Vegas, he is finally back, with the studio-funded The Brothers Grimm and the independent Tideland. He talks below about how The Brothers Grimm almost collapsed, how he's fed up with the press spreading fear about children's safety, and his battle for Matt Damon's nose.

You used to do magic as a child. Are you still trying to create magic with your films?

I did really bad magic, a comedy act is what it turned out to be, and now I've found a medium I'm better at. It's the same thing: I want to astound people! I want to amaze people! I want to surprise! And that's what magic always does for me.

David Cronenberg recently said that he did A History Of Violence, a studio film, because he was tired of struggling to find funding for his own projects. Was that why you agreed to do The Brothers Grimm?

That's exactly why. After failing to get four projects off the ground, here came along a script that a studio wanted to do. I got involved, and Tony Grisoni and I re-wrote the script. Of course, the irony was that everybody turned up in Prague ready to start in full pre-production, and a day later we got a call saying MGM have pulled out. I thought "F***, no. Not again." It was just horrible. But then, within 24 hours, we got a call saying Dimension were interested in getting involved, so up we go again.

Why did MGM pull out?

Well, I can tell you that this guy in the last meeting I had, he was the capo of capos, said, "Why do you want to make this morbid film about animals eating children?"

It wasn't an unreasonable question. I mean here's a film about children in danger precisely at a time when the media is full of scare stories about the perceived threats to children in society. Were you consciously taking that on?

Yup, you got it. The things that I throw into my films are all things that I'm reacting to in reality. There's no question that seeing the way children are ‘protected' really makes me crazy. I'm tired of this thing of children being these totally vulnerable creatures. Wait till you see Tideland [giggles]. I'm tired of this s**t! Yes, kids are vulnerable. But kids are tough, they're strong, they're made to bounce.

And reading the Grimms fairy tales can help?

Those tales existed for centuries before the Grimms wrote them down and they're about real things, real fears, but they also end with happy endings. You go into the woods, the nightmare starts, there's wonderful things and horrible things, and you come out alive. Now to me that was always great training for life rather than protecting kids and saying it's all wonderful. You can say that but kids also see the news all the time, so they're getting this other story about rapists, muggers, child abusers, paedophiles roaming the planet - it's crazy! Maybe that's why so much on the other side is so innocent, because they're protecting them from that. But there's something in between that's probably closer to the truth.

You had some battles with Bob and Harvey Weinstein during the making of The Brothers Grimm. Is it true that one was over your decision to put a prosthetic bump on Matt Damon's nose?

Matt's profile worries me because it's this little nose there. It's a very cute nose. It's a lovely nose. But I wanted Wilhelm, Will as we call him, to be a stronger guy. When we put the bump on, he actually looked like a young Marlon Brando. It was the weirdest thing. It was the smallest bump, it wasn't Pinocchio or anything, but he walked a little bit taller. Suddenly the girls in the different departments started putting his picture up on the wall, with the bump.

So why did the Weinsteins refuse to allow the make-up?

Unfortunately, Harvey and Bob love their posters. The person up there on the poster has to look just like he is, supposedly. Harvey's very obsessed about that sort of thing so that's what the fight was about. But one day we will release the pictures of Matt with the bump on his nose!

Do you see yourself reflected in Jake (Heath Ledger) and Will (Damon)?

Yeah. We actually turned them into the pragmatist and the dreamer, because now we got something to play with. In that sense I understand both characters because making films is very pragmatic, you can't dream your way through a film, but if I didn't have the other side I wouldn't even start the process. Luckily, as Altzheimers kicks in, I keep forgetting how awful the last film I did was. So I'm like, "Oh, this time it's going to be great!"

The Brothers Grimm is released in UK cinemas on Friday 4th November 2005.