On that tight budget, Khoo weaves magic out of a simple tale about an alcoholic father redeeming his failed relationship with his teenage son. 'This may sound trite or contrived, but the film was really magic. It was like a magical force was guiding us,' he says. 'When we wanted rain, it rained. Things just happened.'

It's the lead actor, Francis Bosco, who is, quite literally, magic: the 48-year-old Indian is a professional magician and plays a former magician who's become a sad shadow of himself, working as a cleaner in a nightclub.

'Without Francis, there's no magic,' says Khoo, who met him in a club about 10 years ago. 'We became drinking buddies, I would joke with him, 'The great thing about you, Francis, is if I made a film with you, I wouldn't have to spend money on special effects - it's free.' That's the producer in me talking. When I shot [Magic], I always looked at Fong Cheng [the producer] and asked, 'Are we going to OT [go overtime] or not?'. Most directors would just shoot and shoot, doing it, doing it.'

Almost sighing, producer Tan Fong Cheng corroborates Khoo's no-nonsense ways: 'For this film, he gave the DP [director of photography] only one lens.'

On average, Khoo shoots only two takes per scene. 'Editors are stuck with what I've got,' he says, laughing. Tan adds: 'That's why we start [shooting] on time and end on time. He's a very practical director.'

'I set a good example for young filmmakers,' says Khoo. 'If I can do it, can't you do it, too?'

It's refreshing to see an artist take a practical approach to filmmaking and Khoo relishes the finance talk of film budgets and box office grosses - as you might expect from a son of late hotelier Khoo Teck Puat, one of the richest men in Singapore.

'I watched [my father] and basically believed in his motto, 'Buy cheap, sell high',' Eric Khoo said after his father's death in 2004. 'In many ways, when you look at a lot of my productions, they're like cheap, budget films, but ultimately you make a profit.'

Khoo's father never saw his films ('He'd say they're horrible, boring'), nor helped finance them. Well, maybe just a bit: 'I did ask my father for some money to make a film once and he offered me S$2,000!'

So, the critical and financial success of Zhao Wei Films, Khoo's production company that's named after the eldest of his four sons, aged eight to 14, is all down to Khoo. Most of his films have made money, but success hasn't gone to his head. Khoo says he's 'glad that people supported me along the way'.

'A movie is a concentrated effort. You can have a film like Little Miss Sunshine, which cost US$10 million and makes over US$100 million. The numbers are incredible. Wolf Creek - made for US$1.5 million and makes US$30 million. There's that possibility for that one film to strike it big. Hopefully, whether I direct it or produce it, we'll be able to make that one big hit [from Singapore] that really gets out there.'

Khoo is widely credited with kick-starting the Lion City's renaissance when he made his debut feature, Mee Pok Man, in 1995 after four years of directing award-winning shorts, including 1992's Carcass, Singapore's first film to be rated R.

Mee Pok Man, about a noodle hawker's obsession with a prostitute, won prizes at festivals in Fukuoka, Pusan and Singapore. In 1997 his follow-up feature, 12 Storeys, about alienated and disenfranchised working-class Singaporeans, was the nation's first film to be invited to participate at Cannes. It also won the Federation of International Film Critics (Fipresci) Award at the 10th Singapore International Film Festival. The next year, Asiaweek magazine named him as one of 25 exceptional trendsetters on the continent.

For eight years after 12 Storeys, Khoo turned to producing movies. His lowbrow comedies Liang Po Po (1999) and One Leg Kicking (2001) were panned by critics; Zombie Dogs (2004) is a nasty, highly experimental indie feature; however, 15 (2003), directed by Royston Tan, was loved by critics.

Khoo has no regrets about his hiatus from directing. 'One Leg Kicking made a lot of money in Singapore, which was basically it,' he says. 'Some of my kids loved it. It plays to a very young audience.'

When Khoo returned to the director's chair for Be With Me in 2004, he outdid himself. Again, it was about the working class in Singapore, comprising three loosely connected tales anchored by the real-life story of a blind and deaf woman in her 60s. The New York Times described it as a 'delicate, melancholic movie', and it was selected as the opening film for the Directors' Fortnight at Cannes in 2005.

'Be With Me showed in France for, like, a year and it was considered one of the top 10 best films of the year,' says Khoo. 'For a while after that I felt kind of pressurised. And I thought, 'Can I top this?'.'

He didn't want to wait for inspiration to strike. 'I'm 42. I want to do stuff, do as much as I can before I expire,' he says.

Being awarded the Singapore government's highest honour for the arts and reading Cormac McCarthy's Pulitzer Prize-winning novel, The Road, also inspired Khoo to shoot My Magic. 'One thing that prompted me to do it was winning the Cultural Medallion in 2007,' he says.

'And I was bawling as I was reading The Road. I thought of optioning the rights to the book, but it already had been bought by Dimension Films and it's going to star Viggo Mortensen. I thought if I can't make that film, I want to make my own version. So I zeroed in on the father and son story in My Magic [just like in the book]. I wanted to make it as simple as possible, so simple that a kid could understand it. It's almost like a fable.'

The My Magic fable also prompted its magician star to reconcile himself with his estranged adult son, Khoo says. 'Francis was so excited, he called me and told me, 'We connected again',' says the director.

Khoo's next film is a big-budget production in collaboration with MediaCorp Raintree Pictures, which co-produced Derek Yee's Protege, starring Andy Lau. It's about Rose Chan, a famous stripper in Singapore and Malaysia during the 50s.

'[For the role,] I want to discover someone who's never acted before. They're not jaded. We could get a Shu Qi, but we've already seen her naked. What's the big deal?'

'I want it to be like peek-a-boo, tease, tease, tease. Can I see, can I not see?'

Audiences will have to wait to find that out.