A HOLLYWOOD studio bowed to the will of a small Scottish community yesterday when it apologised for the portrayal of a local man in the blockbuster film, Titanic.

The townsfolk of Dalbeattie, in Kirkcudbrightshire, have battled to set the record straight since local hero William Murdoch was characterised as a villain in the film.

Mr Murdoch, who was first officer on the doomed liner, is cast in the film as a coward and bribe-taker who shoots two passengers, causes hundreds more to die, and eventually commits suicide.

The film infuriated the people of Dalbeattie, including relatives of Mr Murdoch, who maintain the first officer acted heroically and helped passengers to escape the sinking ship.

The film's technical adviser admitted last month the portrayal of Mr Murdoch had no basis in historical evidence and yesterday Twentieth Century Fox, the studio responsible for the film, made an official apology.

The film company also pledged a #5000 donation to the Murdoch Memorial Prize Fund, established in honour of Mr Murdoch, from which an annual award is made to a student at Dalbeattie High School.

The money will be presented by Twentieth Century Fox International executive vice-president, Mr Scott Neeson, on April 15 at a ceremony in Dalbeattie to mark the 86th anniversary of the disaster.

The apology and pledge were made in reply to a letter from SNP MP for Galloway and Upper Nithsdale, Mr Alasdair Morgan, who has led the campaign to clear Mr Murdoch's name.

The letter of apology came from Mr Neeson, who is from Scotland.

Mr Neeson wrote: ''As a Scotsman myself and one who has spent some of the best days of my life at the heart of Dalbeattie, no one is more interested in setting the record straight about one of its citizens than I am.

''While there were reports from survivors indicating that officers did fire guns into crowds, and of at least one officer's suicide, we acknowledge that there is no irrefutable link to Murdoch.

''Officer Murdoch was a decent, responsible, and very human hero, and should remain a source of pride for Dalbeattie, and in the memories of all who know of his life.

''Twentieth Century Fox would like to honour Officer William Murdoch in remembrance of the anniversary of that tragic event with a contribution to the annual Murdoch Memorial Prize in the amount of #5000.''

Mr Morgan welcomed the positive response: ''I was delighted to receive Mr Neeson's letter, especially as I am aware of how much it will mean to the people of Dalbeattie, the pupils of Dalbeattie High School, and most importantly to William Murdoch's surviving relatives.

''This gesture of goodwill by Twentieth Century Fox is to be commended and I now look forward to meeting with Mr Neeson.''

William Murdoch's nephew, Mr Scott Murdoch, 80, who also wrote to the film makers in protest, welcomed the apology.

The retired engineer, who still lives in Dalbeattie, he said: ''I am pleased they have acknowledged Mr Murdoch wasn't such a bad man after all and, indeed, was an honourable and heroic man.

''The admission sets the record straight. It is particularly important as the children in Dalbeattie have been brought up to see Mr Murdoch as a hero but the film didn't show that.

Titanic is the most successful film yet made, grossing more than #600m around the world and picking up a record equalling 11 Oscars, including best director and best picture, last month.

q A British-backed company has joined the race to be the first to build an exact replica of the Titanic in time for a transatlantic sailing for the millennium. A London financing company is backing South African firm RMS Titanic with a #271m loan to build an exact replica of the ship in time to sail from Southampton to New York between December 29 and 31, 1999. RMS Titanic has an exclusive deal to use the original plans of shipbuilders Harland and Wolff.