Only one film in five in Europe is made by a woman director, according to a new report which calls for positive discrimination to combat the imbalance.
A damning seven-year study carried out by the European Women's Audiovisual Network (EWAN) found that although women directors made up 44 percent of film school graduates, less than half of them end up in the industry.
The lion's share of funding also goes to films aimed at men and directed by men, according to the report, "Where are the Women Directors?"
Funders also see projects led by women as more "high risk", it claimed.
"The vast majority of funding resources (namely 84 percent) go into films that are not directed by women," said the report, which was drawn up by researchers at the University of London.
"Low funding perpetuates the scarcity of female-directed films in circulation, in turn affecting the markets' willingness to invest and thus creating a vicious circle," it added.
The report, which examined the film industry in the UK, France, Germany, Sweden, Italy, Austria and Croatia, found women directors everywhere were held down by a glass ceiling.
Although France had a "significantly higher number of (female) directors in comparison with others countries" - thanks to its state-supported funding system - women directors still laboured with lower budgets on average than their male counterparts.
Two-thirds of female directors in the UK who responded to the study thought "private funders react negatively to projects directed by women.
"Women are seen as 'high risk', particularly for higher budget productions, and there is felt to be a bias towards certain narratives such as action drama, and male-led story lines," the report added.
WIN MORE AWARDS
Despite the hurdles they face, films directed by women tend to win more awards even though they are under-represented at film festivals, it said.
EWAN said the European Union, which is a key backer of co-productions on the continent, needs to force an equality agenda on the industry.
In its recommendations it calls for five-year targets to ensure "an equal share of funding for female directors".
EWAN said public service broadcasters should have targets to achieve "a minimum 40 percent share of female directors of feature-length dramas and documentaries of over 60 minutes."
And it said all commissioning bodies should have gender-equal boards.