A British horror movie, which cost just £12,000 to make, is to join a long line of successful low budget shockers as it looks set to emulate huge hits like Paranormal Activity and The Blair Witch Project.

The Cutting Room, which was shot at various locations in East Sussex using a cast of largely unknown actors, has received major retail backing and is currently selling out in Supermarkets up and down the country.

The film follows a group of media studies students and the plot involves a wave of cyberbullying and the disappearance of two girls, which leads the students into an abandoned army barracks, where they discover a shocking secret.

First-time director Warren Dudley says: “We felt that horror is the last genre in modern film where a tiny budget is not too much of a hindrance.

“If you have a good story, likeable characters and a really scary location audiences are happy to engage.

Dudley says: “A big inspiration for me was Oren Peli, who wrote and directed Paranormal Activity. He used his own house for the shoot, so did I, along with houses owned by a variety of friends and family, The Brighton Academy and Newhaven Fort - all locations we could use within our budget.”

The film’s success is partly due to a social media campaign helped by heart-throb Hollyoaks actor Parry Glasspool, who plays student Raz. He says: “We went out to make a fun little horror movie and the reception has just been great.”

Actress Lucy-Jane Quinlan who plays Raz's girlfriend says: “I'm a wimp so I have to really work myself up and watch horror movies and only ever in the daylight."

“I remember Paranormal Activity sticking with me for days! The Blair Witch Project was similar. I think the found footage element really encourages people to question ‘could this actually happen’'”

Paranormal Activity - budget $15,000. Gross takings - $193m.
The Blair Witch Project - budget $30,000. Gross - $248m.
Night of the Living Dead - budget $110,000. Gross - $30m.
Halloween - budget $300,000. Gross - $70m.
The Cutting Room - budget $18,000. Gross '

The film has also got a link to one of Britain’s greatest horror names. Executive producer John Herbert is the brother of legendary horror writer James while actor and producer TJ Herbert is his nephew.

Dudley says: “For me growing up Stephen King's horror always felt very 'American' while James's had a quintessential Britishness that I really loved. His books 'The Rats' and 'The Fog' had as much influence on me as horror movies like Jaws and The Omen during my youth. I genuinely hope James would have enjoyed The Cutting Room and its stripped down 'everyday England' atmosphere."

The film has had rave reviews and has already received several offers from US distributors with film critic Chris Wilson calling it "Easily one of the best British horror films of the last 15 years.", and horror writer Steven Hickey saying, "A genuinely disturbing, cool horror Brit-Flick."

The Cutting Room is available from Tesco, HMV, iTunes, Lovefilm and Amazon with TJ Herbert says: "It's been an incredible journey so far. The writing on the project only started in January 2014 and with the help of a very talented cast and crew, and a brilliant location, we believe we have created something truly frightening!"