The Walt Disney Company has killed off its Australian animation operation, including the company's last studio creating hand-drawn animated features.

The company that took Mickey Mouse , Pinocchio and Snow White to the screen is abandoning traditional two-dimensional animation in the face of the massive popularity of computer-generated three-dimensional animation.

The closure of the Australian studio will see 250 Australian animators and other staff lose their jobs.

Disneytoon Studios Australia has long contented itself with Disney's less-glamorous second-string productions.

It made The Lion King II , The Jungle Book II and The Lady and the Tramp II for example.

Disney Australia has also been churning out other familiar-sounding titles like Brother Bear II , Aladdin II , Peter Pan II , Tarzan II , Lilo and Stitch II and Bambi II .

But perhaps the writing was on the wall that Disney Australia's long line of successful lesser-known sequels was drawing to an end when production began on what will now be the final feature produced by the Sydney studio.

It may be that Cinderella III was one sequel too many.

Changed environment

The company says its decision to close the studio is the result of a changing creative and economic environment.

The stronger Australian dollar of recent years has made it more expensive for foreign-owned companies like Disney to base their production facilities in Australia.

Tim Brook-Hunt from the animation and new media division of the Screen Producers Association of Australia says the revenues have also fallen.

"The revenue from the sorts of product Disney Studio was making from areas such as DVDs has recently undergone quite a downward correction," he said.

Mr Brook-Hunt says the studio's closure is a big blow.

"We've lost a major source of training and talent in the industry but also for the people involved, it's very difficult to see that all of them can be absorbed into the rest of the industry," he said.

Ultimately, it was the phenomenal success of computer-generated 3D-animated films like Shrek , Toy Story and The Incredibles that sounded the death knell for Disney's Australian operation, which specialised in old-fashioned hand-drawn animation.

'A real shame'

Steve Trenbirth is a former animated film director with Disney who left the company two years ago to set up his own production house - Mad Cow Pictures.

"I think Disney Australia has become renowned around the globe really as being synonymous with quality, high-level quality 2D animation," Mr Trenbirth said.

"I tend to look at it personally as short-sightedness and thinking that it's going to be a real shame, because unfortunately for whatever reason the executives in LA [are] shutting them down, they're actually the last Disney-owned 2D studio in the world.

"They shut down Canada, Paris, Japan, Florida as well, it's a real shame to think that being the last 2D studio producing high-end quality Disney work, there'll be no more as of next year."

Mr Trenbirth is sorry to see Australia losing a world-class facility that has served as a training ground for many young animators.

"We all started there - I started there is 1988 as an in-betweener and Disney was a great training ground for people wanting to enter the industry and offered a lot of opportunity for artists to learn about the craft," he said.

"There's going to definitely be a lot of people who won't have anywhere to go and may have to start rethinking their futures."