Naomi Watts, the 43-year Australian star, has been cast as Diana, Princess of Wales in “Caught in Flight,” a drama spanning the last two years of the Princess’s life. It is said to focus on Diana’s romantic relationship with the Pakistani heart and lung surgeon Hasnat Khan, which ended less than two months before her death.

News of the project first emerged at the American Film Market in Los Angeles last November, when Jessica Chastain, 2011’s most ubiquitous Hollywood actress, was attached to the project.

The movie will be directed by the German filmmaker Oliver Hirschbiegel, best known for 2004’s “Downfall,” which depicted Adolf Hitler’s final days in the Berlin bunker. His other films include the science-fiction thriller “Invasion” (2007), starring Watts’s friend Nicole Kidman.

Presumably with the success of “The Queen” and The King’s Speech” in mind, Ecosse Films, the production company behind “Caught in Flight,” is heavily invested in projects about members (or former members) of the royal family. As reported by ARTINFO last week, the British outfit is readying “Girls Night Out,” which will star Alexandra Welch and Juno Temple as teenage princesses Elizabeth and Margaret gadding about London incognito on V.E. Day.

Princess Diana, who separated from Prince Charles in 1992 and was divorced from him in August 1996, met Dr. Khan at the Royal Brompton Hospital in Chelsea in the fall of 1995. At the time, she was visiting a triple bypass patient, Joseph Toffolo, the husband of her friend and acupuncturist Oonagh Shanley-Toffolo.

Tina Brown gave a cinematic account of their meeting in her book “The Diana Chronicles” (2007), as excerpted in Vanity Fair: “Dr. Khan, the senior resident working with the distinguished surgeon Professor Sir Magdi Yacoub, was in attendance. Khan, a young Omar Sharif figure in a white coat, arrived with his retinue of assistants when Diana was at the patient's bedside. The doctor was entirely absorbed in Toffolo's condition and took little notice of the Princess — which, for a woman used to having everyone fawn over her, was almost unbearably sexy. So was the blood on his operating shoes, and so were his caring, expressive eyes. ‘Oonagh, isn't he drop-dead gorgeous!,’ Diana hissed after Khan had left the room. So gorgeous, in fact, that the bemused Joseph had Diana fussing over him at his bedside for 17 days straight.”

The 18-month romance, conducted in private, took off from there. Diana told friends that Dr. Khan was the love of her life. Because he is a Muslim, Diana is said to have considered converting to Islam. She endeared herself to his family on her visit to Pakistan in 1996. But their relationship foundered because of Dr. Khan’s reluctance to live in the public spotlight; his ambition, which brooked no impediments; his belief that marriage between them could not work, and his family’s wish that he should marry into the Muslim aristocracy.

It was over by the second week of July 1997, ended by Dr. Khan, it is alleged, during a painful meeting one night in Hyde Park.  The Princess was devastated. “Those who have read the script for ‘Caught in Flight’…say that the late Princess is not cast in a particularly favorable light; she is shown as a damaged person who stalks the doctor after he ends the affair,” Liza Foreman commented on the Thompson on Hollywood blog at the time of Ecosse’s AFM announcement.

Within a month of the breakup, Diana had become involved with Dodi Fayed, the Egyptian film producer and son of the billionaire Mohamed Al-Fayed. The Princess, who was 36, and Dodi Fayed were killed in a car crash in the Pont de l’Alma tunnel in Paris, along with their driver Henri Paul, on August 31, 1997.

In 2006, Dr. Khan married a Pakistani descendant of Afghan royalty. The marriage ended in divorce; he is now married to a Greek doctor. To his credit, he has never commented on the nature of the relationship with Diana, speaking of her only with respect. "I found her a very normal person with great qualities," he told the Daily Telegraph. "I think she did great work all over the world, not just for the UK but for everyone. That is very important."

“Caught in Flight,” budgeted at $15 million, was written by the playwright Stephen Jeffreys, who also wrote the screenplay for “The Libertine” (2004), which starred Johnny Depp as the debauched 17^th century poet the Earl of Rochester. Ecosse has announced that its Diana movie will reveal “how finding true personal happiness for the first time allowed her to achieve her defining successes, evolving into a major international campaigner and humanitarian.” It will enfold her work on behalf of AIDS and leprosy patients and her anti-landmine activism. There will be filming in Angola where, in January 1997, she toured a minefield, visited amputee victims of landmines, and called for an international ban on them.

Various Diana movies have been mooted over the years. Pathe Films at one point planned a biopic with either Keira Knightley or Scarlett Johansson; Helen Mirren was being targeted to play Frances Shand Kydd, the princess's estranged mother. Knightley ended up starring in a film that was a virtual allegory of Diana’s royal entrapment: in “The Duchess” (2008), she played the Princess’s 18^th century ancestor Lady Georgiana Spencer, who vainly attempted to rebel against her loveless marriage to William Cavendish, the 5^th Duke of Devonshire.

The humanitarian aspect of “Caught in Flight,” which is scheduled to start shooting later this year, may cast some doubt on the viability of a rival project based on “Diana: Closely Guarded Secret,” the 2002 memoir by Diana’s chief bodyguard Ken Wharfe. This film would apparently show the more “cunning” side of her personality. Carey Mulligan and Charlize Theron have each been mentioned for the role of Diana and Ewan McGregor for that of Wharfe. The idea of Mulligan playing the woman who wanted to be “a queen in people’s hearts” is enticing, however, especially if Diana's altruism is to be meshed with Machiavellianism.