Jafar Panahi not in Cannes for This Is Not a Film premiere

Banned Iranian director who received prison sentence for criticising regime stars in movie smuggled out of Iran

Most prints for films premiering at Cannes are delivered to the Croisette by private helicopter, or clutched in the sweaty paws of their devoted directors. Jafar Panahi's new film, This Is Not a Film, was smuggled into the country on a USB stick buried inside a cake posted from Iran to Paris.

Panahi, the virtuoso neo-realist who won a prize at Cannes for his debut, The White Balloon, in 1995, and, at 50, now has one of the most sagging mantlepieces in cinema, is currently stuck in Iran, awaiting the verdict of his appeal against a six-year prison term, and 20-year-ban on film-making, talking to the press and travelling abroad. The sentence was passed in December 2010, after the Iranian government accused him of "colluding with the intention to commit crimes against the country's national security and propaganda against the Islamic Republic". Panahi denies the charges.

So This Is Not A Film was presented by its nominal director, Mojtaba Mirtahasebi, who spends a day with Panahi in his high-rise apartment, sipping tea, chewing sugarlumps and watching the director map out scenes from a screenplay he's been working on. It sounds earnest: in fact it's fantastically entertaining, full of incidents that would be too far-fetched for the wildest farce: endless animals get dumped on the director to babysit, for instance, including a 6ft iguana which paces the apartment restlessly, as unhappy to be cooped up as his temporary master.

For most of the film, Panahi endeavours to exploit a loophole in his sentence by being in front of the camera, rather than behind. But he becomes disillusioned with the project – "Why would you make a film if you could just talk through it?" – and he's a compulsive director, filming his companion and any visitors on his iPhone; documenting the scenes outside the window. The pair even manage to have some fun with the censorship – the end credits give special thanks to a blank screen; that title feels more tongue-in-cheek than drum-beating.

"We have a saying in Iran," said Mirtahasebi, "that when hairdressers get bored they cut each others' hair. That is what we were doing: filming one another." The image is as amusing as it is poignant: for both, simply the documentation of events is enough to make such a project valuable.

It's also a tool in lobbying round the world for Panahi's liberty. "I think making a film is like giving birth to a child – it's a very complicated thing," said Mirtahasebi. "But I think at the same time to spread it around is more difficult – it's like actually raising a child. And that is the function of festivals like Cannes."

It is also the function of emerging technologies: Panahi speaks passionately about the role of the digital world in creating lasting archives, even if they cannot be shared at the time. Mirtahasebi, too, suggests that a familiarity with the online world gave them a natural advantage over the Iranian establishment, which he suspected of ignorance about both cinema itself and the internet: "They don't realise that they can't adapt it to fit their own vision." Indeed, Panahi watched the Cannes press conference unfold through a Skype and an iPad camera – although all interaction was, by necessity, one way.

His colleague, meanwhile, was visibly nervous to be presenting the film in public, eager to emphasise how closely he needed to monitor his words to protect his own safety once he returns to Iran (even the type of cake was information not deemed shareable). Solidarity with his colleague, he confirmed, was a fraught business.

"We have decided to take the risks of what we're doing. Step by step, we are trying to fight. This has a price. But we wanted to use that energy that is not being used in film-making. We didn't want to give up."

Panahi's arrest in December was not his first. During last year's Cannes festival, Panahi was on hunger strike in prison in Tehran to protest against being imprisoned on unspecified charges. The actor Juliette Binoche paid tribute to him in an emotional press conference, and, accepting the best actress award for Certified Copy (directed by the Iranian film-maker Abbas Kiarostami), held up a placard bearing Panahi's name. These actions were widely believed to have aided his release less than a week later.

But his freedom proved shortlived. One might have forgiven Mirtahasebi and Panahi for feeling sceptical about the potential leverage of cinema. Martin Scorsese, Ken Loach, and thousands of others have signed petitions and campaigned for his release. Yet to no apparent avail. Surely there must be some disillusion? "Not at all," said Mirtahasebi. "Hope is what is guarding us. It's how we are able to work and to carry on. Hope is the last thing we've got."

Jafar PanahiCannes 2011Cannes film festivalIranFreedom of speechCensorshipProtestJuliette BinocheCatherine Shoardguardian.co.uk

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