An emotional Moretti accepted the award from husband and wife team Antonio Banderas and Melanie Griffith - who won a lifetime achievement award herself on Saturday.

"I am very happy when people tell me this is both a hard and a sweet film," Moretti said.

Moretti plays Giovanni in La Stanza Del Figlio (The Son's Room)

His movie, which beat 22 others, is about a psychologist coming to terms with the death of his son in a freak diving accident.

As well as directing the film, Moretti also plays the lead character, psychologist Giovanni.

His award confirms his place as one of Italy's leading contemporary filmmakers and is the first time an Italian film has taken top honours at Cannes since 1978.

This is the fourth time that one of Moretti's pictures has been nominated for the Palme d'Or in a career spanning some 30 years.

The closest he had previously come to winning was in 1994, when he took best director for his comedy Dear Diary.

The festival's second-highest honour, The Grand Jury prize, went to The Piano Teacher, Austrian director Michael Haneke's tale of a music instructor seduced by a student.

Isabelle Huppert won best actress for The Piano Teacher

Haneke's film also took both acting awards, with Isabelle Huppert winning best actress and Benoit Magimel winning best actor.

"The fact that this film got three prizes is incredible," Haneke said. "I am very, very moved."

US directors Joel Coen and David Lynch shared the best director prize - Coen for his film-noir thriller The Man Who Wasn't There, co-written with his brother, Ethan, and Lynch for his enigmatic Hollywood tale Mulholland Drive.

The directing awards were presented by Jodie Foster, who earlier dropped out as Cannes jury president due to filming commitments.

There was also success for British filmmaker Irvine Allan, who won a special award for his short film Daddy's Girl.

British-born actress Charlotte Rampling hosted the glittering award ceremony in the Palais des Festivals.

French actor Benoit Magimel received his award from Yugoslavian actress Milla Jovovich

A 10-person jury, led by Norwegian actress Liv Ullman and including directors Terry Gilliam and Edward Yang and actresses Julia Ormond and Charlotte Gainsbourg, had the job of choosing the winners.

It had been thought that a more commercial film like the critically-acclaimed musical Moulin Rouge, directed by Baz Luhrmann and starring Nicole Kidman, might win.

And Shrek, the Dreamworks animated feature about a cynical green ogre and the first animated film in competition at Cannes for 48 years, was also tipped.

The top prize in the Un Certain Regard section - for films deemed worthy of screening but not for the main competition - went to first-time French director Yves Caumon for Amour D'Enfance.

Jodie Foster dropped out of her jury role, but presented an award

Amour D'Enfance stars Mathieu Amalric as a man trying to reconnect with his neglected parents after his father takes ill.

An early award was made on Saturday when Melanie Griffith received her lifetime achievement award for her contribution to film.

Twice married to actor Don Johnson, Griffith struggled with drug abuse before getting her career back on track in the 1980s and starring in the film Working Girl.