Finally, Hollywood is back in business.

The three-month strike that has cost the Los Angeles economy $2 billion (£1 billion) and halted the production of hit TV shows and films was called off yesterday, allowing thousands of screenwriters to go back to their word processors.

The deal between the Writers’ Guild of America and Hollywood’s eight “major” studios, represented by the Alliance of Motion Picture and Television Producers, also means that next weekend’s Oscars telecast will be saved from cancellation. “The strike is over,” Patric Verrone, the leader of the WGA, said. “Our membership has voted and writers can go back to work.”

Analysts say that the aftermath of the walkout could be felt for decades. Studios are likely to consider scaling back the system of producing pilot TV shows and then choosing which ones to put on the air.

It is thought that last year the big American TV networks spent $500 million producing 75 pilots for the 2007-08 season, only about 10 of which survived.

The strike could also see big changes in the glitzy presentations made by TV networks to advertisers in New York every May, during which time almost 80 per cent of the year’s prime-time commercial spots are sold.

For some hit TV shows, such as 24 and Heroes, the end of the strike probably comes too late, and no new episodes are likely to be aired until next autumn. Other shows, such as the American version of The Office, are likely to return within a month to six weeks.

The screenwriters stopped work on November 5 over royalties for television programmes streamed on the internet.

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