Brian Cosgrove: Heck, Penfold! The creator of DangerMouse is back at 79

But Cosgrove warns work may go to China if a promised tax break is delayed

Brian Cosgrove, who created DangerMouse, is working with venture capitalists to raise funds for Pip!, a new venture

The veteran animator behind the spy spoof DangerMouse and a host of other cartoon classics is making a return to the television screen. But Brian Cosgrove, 79, has warned that the UK faces an animation drain to China unless ministers implement plans to give tax breaks to producers.

DangerMouse, the ITV 80s hit about the eyepatch-wearing secret agent and his hamster sidekick, Penfold, was voiced by Sir David Jason, and was watched by 20 million viewers at its peak.

Cosgrove Hall studio in Manchester, which also produced Count Duckula, was absorbed into ITV and closed down in 2009. But Brian Cosgrove, who will receive the outstanding contribution honour at the Children's Bafta awards tomorrow, will revive the name with a new venture, Cosgrove Hall Fitzpatrick (CHF).

The company's first production, Pip!, the animated adventures of a puppy, reunites Cosgrove with Sir David Jason, who has become a director of the firm and voices Pip's sea-dog uncle. Pip! been snapped up by Channel 5, which has pledged to screen 600 hours of children's programming a year.

If Pip! is a hit, it could match the £200m generated worldwide by the British series Peppa Pig. But CHF is working with venture capital partners to raise £2.3m to fund 52 episodes of Pip!, due to air in 2014, and may be forced to produce it abroad.

Brian Cosgrove told The Independent: "We know children's programmes do make money, through merchandising. What's sad about the industry in this country is that it's fallen into a situation where we have to send our animation out to India and China. The talent is still here in directing, animating and model-making. But companies don't have the same funds coming so we have to send the animation out of the country."

He added: "There is a plan for a tax credit which will let us produce animation in the UK. We would be able to make Pip! in this country. That's 52 10-minute shows. It's a good amount of work to keep in the UK if we get the funding together, instead of sending the money outside."

The UK animation industry, led by Aardman Animations, the Bristol-based Wallace & Gromit producers, is pushing for a 25 per cent tax rebate on home-grown productions, the same level that UK films with a budget of less than £20m qualify for.

George Osborne promised a new tax incentive for animation, to encourage new productions and ensure Wallace & Gromit continues to be made in the UK. The Government is expected to unveil its plan to help a £300m-a-year industry that employs 4,700 people, before Christmas. Cosgrove said that, with funding in place, CHF would produce a second series, HeroGliffix, about crime-fighting dogs battling against the world's most evil cat.

'Work was a joy': Praise for Cosgrove

David Jason, television actor and DangerMouse star:

Brian Cosgrove is not only one of the most talented artists that we have in the country at the moment but he also happens to be one of the nicest men it's been my good fortune to meet.

Oli Hyatt, Bafta committee member and chairman of Animation UK: Brian Cosgrove is a legend to all animators and a founding father of the industry as we know it in this country today. You can track most of the talent that is working around the UK to Brian, through his studio Cosgrove Hall.

Debra Gillett, who voiced Truckers, a Terry Pratchett adaptation:

I had the pleasure of working with Brian Cosgrove and [business partner] Mark Hall a number of times and it was always a joy. The quality of the creative work, the high standard on which they based every detail of every project was so reassuring for one of the newer people like me. No matter how long the day, work was always fun, and felt like a family getting together every time we met to record the next set of episodes.