Mexican drug cartels don't like rivals treading on their territory; they don't like the police poking around; and now, it seems, they don't much care for Hollywood taking an interest in their business.

Producers of a film about the murder of a cocaine smuggler, which would have starred Eva Mendes, Josh Hartnett and Ben Kingsley, have been forced to abandon filming on the Mexican coast after the film-makers re­ceived death threats.

Queen of the South, based on a novel by Arturo Perez-Reverte, was due to be filmed in Sinaloa, on the country's northern coast. But, following a decision by Jonathan Jakubowicz, its Venezuelan director, and two of his producers, the plug has now been pulled on the project.

"I've worked really hard to make this beautiful movie, but the safety of my family and my team comes first," Jakubowicz told Variety. "Making this movie [would have] put us all at risk, not only in Mexico but in the US."

The news will heighten fears that Hollywood production, a growing contributor to the Mexican economy, may disappear from the country amid a surge in violence that has killed nearly 7,000 people in the past year. Jakubowicz and his family apparently received threats while at home in Los Angeles. The shaken film-maker last week warned colleagues to think twice before attempting similar projects.

"I beg those involved to be responsible and mindful of the dangerous territory the subject matter inevitably gets them into," he said. "We wanted to shoot in the city of Culiacan in Sinaloa, northern Mexico, the epicentre of the drug wars, but it just wasn't possible. The world should pray for peace in Mexico."

Many other Hollywood producers, who may be tempted to shoot south of the border because of lower production costs and tax incentives, are also now starting to think twice.

Security has been a growing problem since 2005, when Jennifer Lopez and Antonio Banderas' Bordertown was forced to move production to New Mexico after its crew was followed and had their hotel rooms ransacked.

Last year, the makers of a Paramount film called El Traspatio (The Backyard) reported that an actress from Ciudad Juarez, where they were shooting, found a slaughtered lamb on her doorstep, with a death threat pinned to it.

She was replaced for her own safety. Several other crew members on the film, about local drug murders, reported receiving sinister anonymous phone calls.

The jumpiness in Hollywood is bad news for the Mexican economy, which has been hit by the global downturn together with a precipitous decline in the tourist trade after the US state department advised citizens against crossing the border. Free-spending foreign visitors are virtually absent from resorts like Tijuana, which would traditionally be packed with revellers celebrating spring break.

Escalating security problems, which have seen hundreds of gruesome public murders, are the result of a government crack-down on drug cartels which control the $5.5 billion-a-year cocaine trade into the US.

Although several leading drug cartel bosses have been arrested, rival groups are now battling over their former territories. Thousands of police officers, many with financial ties to cartels, have been killed. Army units are being brought in to keep the peace in some border areas.

The US government is concerned that if the violence continues to spread, Mexico could acquire the label of "failed state".

Hillary Clinton, the US Secretary of State, who visited the country last week, publicly admitted that the security problems were being fuelled by the failure of the US to stem both the supply of drugs into its border areas, and the flow of weapons in the opposite direction.