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The film, which will star Gavin & Stacey's Mathew Horne and James Corden, casts the singer as a lesbian vampire living in a cursed village.
"James wants Lily to take on a bigger part but she is happy with a cameo," a source is quoted as saying.
Directed by Phil Claydon with a script from newcomers Paul Hupfield and Stewart Williams, Lesbian Vampire Killers is scheduled for release next year.
Corden was romantically linked with Allen in April.
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