The film, about Ireland's struggle for independence, beat 19 others to the prestigious prize.

Hong Kong director Wong Kar Wai, who led the jury, said his panel had looked for films which reflected "compassion, hope, bonding and solidarity".

Other jurors included actors Tim Roth, Samuel L Jackson and Monica Belluci.

Wong said the jury's decision had been a unanimous one.

British actress Helena Bonham Carter, who was also on the jury, said Loach's film "hit us all profoundly".

"It was one of five films about war and it was a fantastic education about the Irish problem," she added.

"There was a tremendous humanity. I can't explain our mass reaction but we were all profoundly moved."

Loach, 69, has said the film, which describes the early days of the IRA in the 1920s from an Irish perspective, is also a critique of the US-led invasion of Iraq.

"Maybe if we tell the truth about the past, maybe we tell the truth about the present," he said as he accepted the award.

Loach thanked the jury of "the most wonderful festival of cinema in the world".

"Our film is a little, a very little step in the British confronting their imperialist history," he said.

The film's Scottish scriptwriter Paul Laverty is no less radical, this 8` radio interview treats the political messages in the film and offers a critique of modern day Ireland since it became the neo liberal Celtic Tiger. Music by Dead Can`t Dance and Dick Gaughan

Give a listen: radio.indymedia.org/news/2006/05/9994.php

BBC news - news.bbc.co.uk/1/hi/entertainment/5025812.stm