Storyland, the Dundee animation company, is hoping that the success in London of the premiere of its first major television film, Music and Moonlight, will lead to an eventual stock market flotation.

Corporate development director, Vic Quinn, said: "The project has attracted a lot of interest and we expect to win more commissions on the back of it. If we can land two or three big commissions, we hope to float on the stock market in two to three years."

Storyland was set up earlier this year by children’s author and illustrator Joe Austen. The company says it would plough funds from a flotation into setting up an animation studio in Dundee, creating up to 30 jobs for the city.

Joyce Matthew, business development manager at Scottish Enterprise Tayside, said: "This is another example of a new media company that has strong potential to develop, and create jobs for the talented and skilled people that we have in Scotland."

The enterprise group’s Interactive Tayside project has been involved with the firm since its conception.

Storyland’s film, Music and Moonlight, is a half-hour children’s story which will be screened on ITV this Christmas. It features voices from Scots comedian Rory Bremner and music from Hogmanay Show favourite, Phil Cunningham.

The film features a bamboozled animated monster, which eventually turns out to be not especially monstrous. The project, which was commissioned by Children’s ITV, is a Christmas special of The Story Store, a children’s television series which was devised and developed by Austen.

Storyland owns all the intellectual rights to this series, and hopes to capitalise on the merchandising possibilities. The company said: "We’re very keen to explore video and merchandising as an additional vehicle for our programmes, and we’re currently developing one of our ideas as a feature film."

Storyland owns the rights to the rest of Austen’s children’s hits, which include The Magic House - a series developed into two successful television formats for BBC Scotland and Scottish Television and published as a series of books. Quinn added: "We still have a whole attic full of Joe’s notebooks and stories, so we’ll never ever run out of ideas."

Storyland has another project in the pipeline - a digitally animated television series Atoz - which is aimed at a broader family audience and set on a war-torn futuristic planet.

Music and Moonlight was premiered at the BAFTA theatre in London. It is expected the film will be given a prime time screening over Christmas, and repeated for at least the following two years. The film has been made using ten-inch high models and traditional stop-frame techniques. But Storyland use all forms of animation, including cutting- edge digital methods, and plans to expand into new technologies as they emerge.

ITV awarded Storyland a commission for one-quarter of the total budget - a generous sum for projects of this kind. Storyland employs just four people, with freelance animators and puppeteers being brought in for each job.

Its planned studio in Dundee would deal with both stop-frame and computer-generated animation.

There are more than 200 firms involved with computer games and electronic entertainment in the Tayside region. They employ more than 1,500 people and have an estimated turnover of £100 million.