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The Oscar-nominated British actor is being eyed to play a "darkly complex" character opposite Daniel Craig and Judi Dench. Fiennes previously worked with Bond director Sam Mendes on a Royal Shakespeare Company production of Troilus And Cressida.
"It's the first of a new generation of Bond films, and the ideas Mendes has push the film into darker territory where the characters are modern, mature and challenging," a source said, adding that Fiennes's role is "one of extreme complexity and only an actor of great ability and dexterity can take it on".
Kevin Spacey had also been approached to star in the latest Bond film but will not be available because of his Old Vic production of Richard III.
Javier Bardem is currently in talks to play 007's main nemesis.
The untitled 23rd James Bond movie will open in cinemas on November 9, 2012.
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