Partly inspired by the Edinburgh author’s experiences of growing up in the Scottish foster care system, the book saw Fagan named one of Britain’s leading young novelists of the decade.
Loach, 77, who will act as executive producer, is best-known for gritty and often harrowing dramas such as Kes, Carla’s Song, Sweet Sixteen, My Name Is Joe and Ae Fond Kiss. He will also be helping Fagan, 36, who now lives in Fife, to develop the storyline and script, while his son, Jim, who made his own film-making debut two years ago, with Oranges and Sunshine, will direct The Panopticon.
The story, set in and around the capital, revolves around 15-year-old Anais Hendricks – who is accused of assaulting a police officer – and her experiences in a young offenders’ institution.
The first draft of the book was penned in the summer of 2010 when Fagan – who had moved 16 times and had three different legal names by the age of five – was on a creative writing course.
Before the book was released last year, she studied film and television , claimed first prize in a short-play competition run by the Traverse Theatre in Edinburgh, won writing awards from the likes of Scottish Screen and Arts Council England, as well as working as a writer in residence in hospitals and prisons. She holds an MA in creative writing from Royal Holloway, University of London.
Released last April to rave reviews and lavish praise from authors Irvine Welsh, Ali Smith and Andrew Motion, The Panopticon was named on the “Waterstones 11” hit-list of best debut novels in 2012.
This year, Fagan was the only Scot to be named on Granta’s prestigious once-a-decade Best Young British Novelists list and also made the shortlist for the James Tait Black Prize, Britain’s oldest literary prize, awarded by Edinburgh University, in the summer. Fagan, now a writer in residence at the university, told The Scotsman she had been involved in talks about a film adaptation almost as soon as her book was released. She is working on The Panopticon for Loach’s company while writing her second novel, The Sunlight Pilgrims, set ten years in the future after a flooding disaster hits London.
She said: “There was actually interest from around the world, including the United States, but I felt very strongly that the film had to be made in Scotland.
“The book does mention Edinburgh and it is actually set in Midlothian, and I was brought up in and around the city, which is where it is going to be filmed.
“I was very keen to be involved with the film, so I’ll be doing the story treatment, which is sent to potential funders, and will also be doing the screenplay. I didn’t write the book with a film in mind, but a lot of people have said they could imagine it as a film.
“I’ve not met Ken Loach, but will hopefully be meeting him soon to discuss the script, but I’ve already had a couple of messages from him to say that he loves the book, so it’s very exciting.”
The Panopticon will be the first major film made in Scotland by Loach’s Sixteen Films since the award-winning comedy-drama The Angels’ Share.
Camilla Bray, producer of The Panopticon, said: “It’s all still in the very early stages, but we would hope to start filming towards the end of next year.”
“We can confirm Jim Loach will be directing, in what will be his second film after Oranges and Sunshine and we’re already receiving help from Creative Scotland with the development of the project.”
A spokeswoman for Creative Scotland said: “Jenni Fagan is a talented and distinctive Scottish writer, who’s debut novel has received outstanding reviews.
“It’s great to see acclaimed production company Sixteen Films working with an exciting, fresh talent such as Jenni to develop a new Scottish film.”
Ali Bowden, director of the Edinburgh Unesco City of Literature Trust, said: “The Panopticon is a stunning, stop-you-in-your-tracks kind of book. It’s incredibly vivid and so perfect for a film adaptation.”