From David Lynch’s Ronnie Rocket to Ridley Scott’s I Am Legend, the history of cinema is littered with much lamented sci-fi classics that never came to pass. And now The Man Who Killed Don Quixote can be added to their number.

It should have been one of Europe’s most spectacular movies, but a mere six days into production – days which unfolded like biblical plagues – the film was shut down, ending what for director Terry Gilliam had been a cherished dream.

“Really, I suppose The Man Who Killed Don Quixote began as long as 15 years ago,” explains the one time Monty Python animator, “It was after Munchausen, I called Jake Eberts, who was one of the executive producers of Munchausen, and said, ‘Jake, I’ve got two names for you, I need $20million. One of them is Gilliam and the other one is Cervantes’ – and he said, ‘Done’. So I sat down to read Don Quixote, which I’d never read before, and I just thought it was incredible, an extraordinary piece of work. So I started work on it. But the problem was, how do you treat Cervantes with respect, and be true to the book? The book is so vast, and to condense something into a film is so limiting. And so it died.

“Then some years later, I got excited about it again. I had this idea, maybe there’s a way of changing it, so that we’re not hooked up on Quixote himself. Let’s have, as the main character, a modern man who somehow gets transported back into the 17th century. And we set it in the modern world of an advertising executive, who’s an arsehole, and so you have a slick advertising executive as a servant to a 17th-century lunatic. That became The Man Who Killed Don Quixote. In the end I feel that Cervantes would quite like what we’ve done; we were able to use the best of Quixote, and weave another tale around it.”

Of course, this sounded like an absolute dream-ticket in film terms – Gilliam’s work in movies such as Brazil, The Fisher King and Twelve Monkeys has more than demonstrated his breathtaking awareness of cinema’s visual possibilities, and the prospect of his weird and wonderful aesthetic married to the delusional visions of Cervantes’ literary creation, as he battles on against the offending windmills, seemed perfect. Indeed the director himself is willing to acknowledge a certain shared sensibility between the fantasy world that Don Quixote inhabits and his own realm.

“I suppose this doppelganger idea, of Quixote and me, is true on too many levels. Unlike Quixote I have actually put films together, which involves a lot of practical business – dealing with money, dealing with reality. But what drives me is the same thing that drives Quixote: this unwillingness to accept the rather banal world that we live in.”

Not surprisingly, Gilliam, who has a notoriously fraught relationship with Hollywood (and indeed with his native USA) was keen to avoid American studio backing, so that he might realise his vision of Quixote more fully.

“One of the key things was to raise the money without any American involvement; this was part of the project for us, to do a big budget film without even an American distribution deal.

“The thing is that Americans do need to develop a sense of irony, because what predates a sense of irony is a certain amount of wisdom, knowledge, intelligence and awareness. Everything is so literal in America! That’s why Catholics haven’t done too well there. Protestants marched in and got rid of symbolism!

“So it was to be a European movie. Which we suceeded in doing. We got Jean (Rochefort – the French actor chosen to play Quixote), we got Johnny (Depp – to play the yuppie scum), we got Vanessa Paradis and we got a lot of great English actors like Bill Patterson.”

Still, going the European route was to prove problematic for the 62-year-old director. Without the unlimited resources that the Hollywood studios could provide his project was left at the mercy of all manner of force majeure – the lead actor fell ill, the shoot was beseiged by freakish weather and everything began to go stupendously wrong.

“The problem with Quixote was that everything was a problem,” says Gilliam. “Getting the money was a bit late, getting contracts signed for the actors, everything was – I hate to say it – but it was badly produced. It’s an easy thing to blame ‘the producers’, but I’m afraid too many of us agreed with that one. The things that we needed were not delivered when we needed them. A film is like a train – once it’s moving you have to have the tracks built in front of it.

“There’s one side of me that thanks Jean Rochefort for getting so ill, for getting a prostrate infection, because I have a feeling that the train might have gone off the rails just further down the line.”

And so the entire production came to an end. You can see the surviving footage, and witness the full scale of the fallout, in Lost In La Mancha – a making of, or if you will, un-making of, documentary by Keith Fulton and Louis Pepe, with whom Gilliam had worked before.

“I thought it would be good to have a diary of the film, of Twelve Monkeys, and picked Keith and Louis out of a group of students to do it. And I wore a microphone through the making of that and said, ‘It’s yours’, Gus, I’m not going to censor anything, you have access to me all the time’. It may be because I don’t know what reality is – let’s assume that for a moment – and here’s a chance to have somebody record what is really going on.

“And then maybe I can learn something. So Hamster Factor (the ‘making of’ documentary for 12 Monkeys) came out and I thought it was a wonderful work. And then when Quixote began I thought, let’s have another diary, because something’s bound to happen. They came a bit late so they missed some of the early development – but they arrived in time for the bloodbath.”

And how does Gilliam feel about the fruits of Fulton and Pepe’s efforts on this occasion, Lost In La Mancha, now getting a cinema release in its own right?

“Well, maybe the documentary will resuscitate some belief that I know what I’m doing and I’m responsible. On one hand the legend of the out of control monster is fun and it certainly confounds Hollywood executives, but it also becomes very tiresome at times. So yeah, I think that the documentary is truthful in the way that it shows that I am literally a very serious filmmaker, very responsible. I’m involved in eveything, I’m looking at the pennies, I’m looking at the whole thing trying to make it. We’re always working within limited budgets. It’s interesting that post- The Adventures Of Baron Munchausen (Gilliam’s 1995 extravagant box office bomb) the legend grew up that I was this madman out of control, which is just not the truth. So maybe the documentary is useful in getting me employment in the future!’

Hopefully, Gilliam can continue on his artistic journey in the future. Perhaps he can tap the English for a loan – they are his adopted people after all.

“Don’t get me started,”’ protests Gilliam. “When I came to Britain, I thought the people were all the height of generosity and civility and politeness. But they are really the least polite people in the world! They are the most tribal people on the planet! They hate one another and they’re stuck on that little fucking island. That’s why they went out and created an empire. Anyone who had the energy got out of that place and killed somebody!

“They have this veneer of civilization, but it’s really only there to keep them all from killing each other! No I’m not going to be relying on them!”