A FAMILIAR face has returned to the news stands recently.

Young, blonde, coiffed, head to one side, a gaze that is half searching for, half avoiding, the camera. If it is not Diana, Princess of Wales herself then it is Naomi Watts, who plays her in the controversial new biopic, Diana.

The film focuses on the last two years of her life and her relationship with Hasnat Khan, a heart surgeon. Khan has said he will not watch the film and accuses it of being based on "hypotheses and gossip". Ingrid Seward, the editor of Majesty magazine, has called the picture another "hijacking" of the princess's memory.

Little wonder, then, that the film's German director, Oliver Hirschbiegel, has his responses ready when challenged about the film's accuracy when we meet in London.

"The whole thing is based on thorough research and double checking one's sources," he says. "On the other hand of course you have to take certain liberty because it's a dramatic interpretation of events."

The film is based on Kate Snell's book, Diana, Her Last Love, though Hirschbiegel says this was a starting point for further delving.

"Whenever you do something that depicts true events or characters who are still alive you have to do thorough homework. You do research, you meet people, you ask questions, you go back to those people and ask more questions, you cross question those questions and you look at the accounts and how likely it is that this is true. You have to do it in a very responsible way. If you do that you can really focus on telling the tale right."

Hirschbiegel has experience when it comes to handling controversial biopics. Downfall, his 2004 drama depicting the final days of Hitler in the Berlin bunker, was initially accused of humanising the dictator by showing him to be kindly towards his junior staff. But no-one could leave a viewing of Downfall in any doubt as to the murderous madness of its subject or the regime. The Academy Awards judges agreed and Hirschbiegel's film was nominated for a best foreign picture Oscar (it lost to Alejandro Amenabar's The Sea Inside).

What the British public feel about his latest movie will be revealed when the film is released next week. Are people ready for this biopic of the People's Princess, or even interested?

Hirschbiegel confesses he didn't know much about Diana beyond the headlines when he was first approached about the picture by Ecosse Films, makers of Mrs Brown and Nowhere Boy. The more background he read, the more fascinated he became, particularly with the British public's attitude towards her.

"This whole thing caught up with me, what the monarchy means here, how much British identity has to do with their monarchy, if they hate it or like it. Which is something we don't have in Germany so that's a big advantage. I come without baggage. It's more like a phenomenon to me, I look at it with more of a looking glass."

The film depicts Diana as a lost, isolated soul before she meets Khan. The relationship with him, according to the film, developed alongside her growing involvement with international causes, particularly the movement to ban and remove landmines. While the picture inevitably covers the paparazzi who were with her at many stages in her life, it also shows that Diana's relationship with the press could be a complex one, with her using them and vice versa.

In any biopic of Diana there was always going to loom the question of how to handle her death in Paris. Hirschbiegel approached this by putting himself in the position of the audience His conclusion: no one would want, or need, to see the detail of the crash.

"If I had to depict it, where do I stop? We know about these photos that were taken that were never published. Where do I as a storyteller stop? I certainly didn't want to go there."

He chose instead to base the final scenes on the CCTV footage from the Paris Ritz on that night in 1997, the ones which show Diana travelling in the lift with her companion, Dodi Al Fayed, and leaving the hotel. "I find them far more haunting, sad and devastating than seeing yet another car turning over and crashing. I see that every day in any TV movie or action film coming from the States. It would diminish her legacy and what we want to remember her for."

Despite his research, final conclusions about Diana remained elusive. "Whenever you think you have understood her she does something different." If she reminded him of anything it was "an old fashioned movie star", such as Marlene Dietrich or Lauren Bacall. "Strong minded, at the same time not shy of being a woman and being sexy, outspoken, opinionated. We hardly ever see these women any more."

As for the accusation that the film is just another cash-in on Diana, he says: "Well, I heard that when I made a film about Hitler." It goes with the territory, he says. For him, it's all about having a good story to tell. "That's my biography, what I've tackled so far. It's not like, 'Oh I'll do this because it is going to be very successful.' It doesn't work that way, at least not for me."

After Downfall, Hirschbiegel worked in the US on The Invasion, a science fiction thriller starring Daniel Craig and Nicole Kidman which earned lukewarm reviews. Aside from Diana, he continues to be best known for Downfall, a film that has lived on through the thousands of YouTube parodies of Hitler's rant in the bunker scene. Even after so many versions, Hirschbiegel still gets a kick out of the inventiveness shown. "Most of them are really good and funny." His only wish, he laughs, is that he earned royalties from them.

The response to Downfall internationally - initial concern followed by praise - was mirrored in Germany. "Sixty to 70% of the press were hitting at me, basically telling me you are not allowed to do this. Often the left, liberal press funnily enough, who I consider 'my people'," he smiles. "Conservatives were more on our side, saying it was about time to do this."

The audience, however, was on his side, the young and old in particular. "Not so much in the middle range. It's all revised now, people get it now, but at the time there was quite a controversy."

He doesn't understand why there should be biopic subjects that are deemed too hot to handle. "Is there a rule, a law, like how long do they have to be dead? If a famous figure sets an example of any kind, if we can learn from that figure, the figure should be depicted. That's what storytellers have to do, that's a duty really."

After Downfall and Diana he might be forgiven for avoiding thorny biopics in future. Not so - perhaps. For his next film he has another subject in mind, but he wants to consider it further before committing. All he will say is it is a man.

"I'm in negotiations with myself. It's another tricky one. I'll tell you if it happens."

Diana opens in cinemas on September 20.