THE guns have been drawn as Ned Kelly bids to become the next Australian blockbuster.

As this exclusive picture shows, the latest film incarnation of the famed bushranger looks to modernise the myth for a contemporary cinema audience.

Heath Ledger stars in the $31 million film opposite Geoffrey Rush, Rachel Griffiths, Orlando Bloom and Naomi Watts (who he first met and fell in love with on set).

Watts plays Kelly's lover, Mrs Julia Cook, in Ned Kelly.

"It's a small role but it's really a significant one," Watts said.

Watts' new bankability as a Hollywood star, on the back of the strong worldwide box office performance of The Ring, adds clout to what many film industry employees hope will rival 1995's "break-out" hit Shine or even Moulin Rouge.

"Everything we're doing is positioning this not only as the biggest Australian film of next year but, more than that, as one of the big films of 2003," UIP national marketing manager Jon Anderson said.

The film, loosely adapted from Robert Drewe's novel, Our Sunshine, and directed by Two Hands' Gregor Jordan, will premiere in Melbourne in mid-March.

"I have huge hopes for it," Watts said. "It's obviously a wonderful story that we'll all be able to identify with and I think will also translate across the world.

"It's wonderful we got this movie made with Australians playing Australians rather than having to pull in American movie stars just to get American box office appeal."

The appeal of that Australianess will be tested this week during test screenings in Los Angeles.

"There's a lot of general interest in it and because it's got Heath, Naomi and The Lord of the Rings' Orlando Bloom, it will appeal to younger audiences," Anderson said.

"Kelly's story has resonance with a wide variety of Australians."