Penelope Cruz was nominated on Friday for best actress in the Bafta awards, the most prestigious in British cinema, pitting her against such home-grown screen goddesses as Helen Mirren, Judi Dench and Kate Winslet.

Guillermo del Toro's Pan's Labyrinth, a Mexican-Spanish fantasy about Franco's Spain, currently the third most popular film in the US, is up for best film, alongside Pedro Almodóvar's Volver, in which Penelope Cruz stars.

France has long adored Spanish cinema; Hollywood has recently succumbed to its charms. But the Hispanic film industry has long felt that the language barrier held it back in Britain, despite fervent minority followings for directors like Almodóvar and Alejandro Amenábar, and actors like Javier Bardem.

That, however, seems about to change.

"This year we've seen Hispanic films with Hollywood stars competing equally with Anglo-Saxon films, " says the cultural critic Aurora Inxausti. "For the first time we've lost the sensation of being at the back of the queue. We now compete on equal terms with the best. This is completely new. It's been a gradual process, but this year we're breaking through to the English-speaking public with actors, directors and technicians of extraordinary quality."

The American success of Babel, starring Brad Pitt, and directed by the Mexican Alejandro González Iñárritu, is expected to boost the film in Britain. English-speaking audiences are also reassured by seeing familiar stars in Hispanic productions, such as Viggo Mortensen of Lord of the Rings fame in Alastriste, a blockbuster about a 16th century Spanish soldier-adventurer by the veteran director Agustín Díaz Yanes. Adrien Brody spent months in Spain preparing for his title role in the forthcoming biopic Manolete, about a legendary matador.

Penelope Cruz plays the love interest in that movie;

she also shares screen credits with the Mexican star Salma Hayek in Bandidas, a movie described by one critic as "shameless, silly and very entertaining". The two Latin sexpots play skimpily-clad bank robbers in an exotic high-energy romp that echoes Louis Malle's Viva Maria of 1965, which starred Brigitte Bardot and Jeanne Moreau.

The Cruz-Hayek pairing produced an intense friendship between the two women - and some provocative photos, prompting rumours of a lesbian relationship. Cruz laughed off the reports on the David Letterman show in the US.

"We are like sisters, and we have the same sense of humour. We posed like that in front of 100 photographers, and now they say we're lovers.

I'm sorry, but that's not the case."

None of this does any harm to the ratings. But Cruz and Hayek don't need such gossip;

they are serious players.

Hayek, who pipped both Madonna and Jennifer Lopez to win the title role of the Mexican artist Frida Kahlo in the award-winning Frida in 2002, is now a top-rank producer, responsible for transforming a Colombian television soap opera into the US smash hit Ugly Betty, now showing on Channel 4.

And Cruz, whose role in the Oscar-nominated Volver prompted comparisons with the 1950s glamour of Latin stars like Sophia Loren, has set up her own production company.

"Globalisation is making English-speaking people receptive to influences outside their culture. They need to see other things, " says the prominent cultural commentator Jesús Ruiz Mantilla.

"And that door is opening at a moment of extremely high quality Hispanic films."

Spanish cinema has adopted the direct narrative style of the finest British tradition.

"Today's Hispanic films don't get lost in decorative detail but concentrate on character, and stories of life experience."

Today's Spanish actors - and especially actresses - are better than ever, he reckons, something audiences in this part of the world appreciate.

"A good story with good actors is the recipe for good cinema, and ours is now world-class."