Daniel Craig is growing a beard for the new James Bond film.

The actor is reprising his role as 007 for a third time in upcoming instalment 'Skyfall' - due for release in 2012 - and the usually suave spy will sport an unshaven look for the first time.

Bosses are also reportedly scaling back production costs on the movie - which had been delayed because of studio MGM's financial problems.

A source told The Sun newspaper: "They've really scaled back. The lavish production and locations have been cut. There is only a reduced cast and crew travelling to the few overseas destinations. There won't be as much hand-to-hand fighting, it's gone back to blowing stuff up - including London's Vauxhall Bridge."

Daniel - who married actress Rachel Weisz earlier this year - has been busy for the last six months getting himself into prime physical condition for his return as Bond, undergoing a gruelling exercise regime.

A source told the Daily Star newspaper: "Daniel has been on an intense five-day-a-week regime, running around Central Park, doing sit-ups and then swimming and playing tennis every weekend. He's in the best shape he's ever been."

The James Bond character has been seen on screen once before with a beard.

In 2002's 'Die Another Day' Pierce Brosnan was seen with long facial hair after being taken captive by North Korean soldiers.

However, 'Skyfall' will be the first movie where Bond chooses to have a beard.