The BBC's Parminder Sandhu: "The awards have established themselves on the film circuit"

Watson's Best Actress award was one of two for the movie Hilary And Jackie, which also won a Best Director title for Anand Tucker.

Star guest: Diana Ross

In a star-studded ceremony at London's Cafe Royal, Best Film was named as Wonderland, directed by Michael Winterbottom.

It follows three generations of one family as their separate paths cross each other over one weekend in London.

Sir Ian, star of Gods And Monsters, beat off strong competition from Michael Caine and Ray Winstone, last year's Best Actor winner.

Lara Belmont took the Best Newcomer title for her harrowing portrayal of an abuse victim in Tim Roth's powerful directorial debut The War Zone.

The film had the greatest number of nominations but took just one title.

Sir Ian McKellan, star of Gods and Monsters

BIFA founder Elliot Grove said: "The fact that there is no one film which has dominated tonight's awards reflects the diversity of film-making in the UK over the past year.

"It is very rewarding to see that, from a total of 84 films under consideration, over 60% were directorial debuts.

"We set out to recognise and celebrate British independent film-making talent."

To be eligible for consideration, films must not be solely funded by a single studio.

They must be produced, or majority co-produced by a British company, or in receipt of at least 51% of their budget from a British source.

Hollywood star Anjelica Huston arrives at the awards

This was the second year of the awards ceremony and again there was an emphasis on gritty tales of modern life.

Director Nicolas Roeg was honoured with a Lifetime Achievement Award for his long service to the film industry.

A former director of photography - whose work graces the classic Lawrence Of Arabia - he went on to make Performance, Walkabout and The Man Who Fell To Earth in the Seventies.

He later went on to create Insignificance, Track 29, Castaway and the children's movie The Witches.

Wonderland winner: Michael Winterbottom

The awards - sponsored by Rover - were hosted by actor John Gordon Sinclair, and international stars presenting awards included Anjelica Huston and Juliette Lewis.

Last year, Winstone won Best Actor for Gary Oldman's hard-hitting Nil By Mouth and Kathy Burke won Best Actress for the same film.

Ken Loach won Best Film and Best Director for his uncomprising My Name is Joe.

The awards are part of the Raindance Festival of British Independent Film which runs until 21 October in London.

List of winners

Best Actor: Sir Ian McKellen (Gods And Monsters)

Best Actress: Emily Watson (Hilary And Jackie)

Best British Independent Film: Wonderland

Best Foreign Independent Film (Foreign language): All About My Mother.

Best Foreign Independent Film (English language): Happiness

Best Director: Anand Tucker (Hilary And Jackie)

Douglas Hickox Award for best directorial debut: Lynne Ramsey(Ratcatcher)

Best Original Screenplay: Ayub Khan Din (East Is East)

Best Achievement In Production: Human Traffic

Best Newcomer: Lara Belmont (The War Zone)

Lifetime Achievement Award: Nicolas Roeg

Producer Of The Year: Simon Channing-Williams