The actor has been billed to star in 'The Infiltrator' - the story of British soldiers going undercover to penetrate the Provos.

His role is based on Newry-born 'Kevin Fulton', the former Royal Irish Ranger who became a spy at the heart of the terrorist group.

The movie, due to release in 2008, has been described by its screenwriter, Joshua Zetumer, as a "thinking man's action film".

Fulton is said to be "flabbergasted" that the Titanic star has been lined up to play him.

He declined to comment last week, but a friend said: "I don't think Kevin ever thought he'd be portrayed by a heartthrob like Leonardo DiCaprio. There isn't much of a resemblance, to be honest.

"But it's a big thing, though, if a huge studio like Warner Bros picks up the story of your life and decides to choose one of the biggest stars in America to play you."

Details of The Infiltrator - to be produced by top film-maker David Benioff - have emerged in leading Hollywood publications including Variety.

Scriptwriter Zetumer told Variety: "The Infiltrator is a thinking-man's action movie. It's got these big set-pieces, but at the same time it's kind of an anti-James Bond film.

"It's inspired mainly by John le Carre, but with a good dose of The Bourne Identity thrown in."

The idea for the film came from an interview Fulton gave to the Atlantic Monthly magazine in the US in which he recounted being tasked to infiltrate the IRA while serving in the RIR in the 1980s.

He also told the mag of his later role acquiring hi-tech electronic equipment in the US for the Provos with the full knowledge of his Army and MI5 handlers.

In May 1981 he agreed to a 'bogus' discharge from the Army and was sent to Newry to join the IRA.

It wasn't until 1988 that he was 'green booked', becoming a fully-fledged IRA member, even though they knew he'd served in the British Army.

Fulton claims that while he was in the Provos he was handled by Jonathan Evans, now the head of MI5.

He fled Ulster just before the 1994 ceasefire after helping thwart a murder bid on a top RUC man in Belfast.

Believing he'd been unmasked, Fulton refused to turn up for a third interrogation session with notorious 'nutting squad' thug Freddie Scappaticci, who it later emerged had been recruited as a British agent.

Fulton told all last year in his autobiography, Unsung Hero. He has since been interviewed by the PSNI about IRA operations he was allegedly involved in following complaints from the victims' relatives.