According to Variety, Walden Media, Beacon Pictures and Revolution Studios are teaming to produce a "Narnia"-scale pic based on children's fantasy novel The Water Horse, by British author Dick King-Smith.

Robert Nelson Jacobs will pen the live-action/CGI pic and Jay Russell will direct. Production is expected to begin in May in New Zealand.

Ecosse Films production will be the last film Revolution will make under its current term agreement with Sony.

The Water Horse tells the story of a lonely boy in Scotland who finds a mysterious egg from which hatches a "water horse" -- a mythical sea monster of Scottish legend.

Helmer Russell, who has been pursuing this project for five years, said that the tone and look of the film will be more realistic than fantastical.

Producing are Robert Bernstein, Douglas Rae, Barrie Osborne and Charlie Lyons.

F/x will be done by Weta Digital and Weta Workshop, which most recently created the visual effects in King Kong. Weta also worked on Walden's "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe," which was produced in association with Disney.

Upcoming Walden pics include How to Eat Fried Worms, with New Line, and Charlotte's Web, with Paramount and Nickelodeon.

The Water Horse: Legend of the Deep was released December 25th, 2007 and stars Bruce Allpress, Geraldine Brophy, Eddie Campbell, Ben Chaplin, Peter Corrigan, Brian Cox, Carl Dixon, Alex Etel. The film is directed by Jay Russell.