Nope, Disney isn't looking to stretch their Little Mermaid brand into live-action territory; instead, acclaimed director Joe Wright (Atonement, The Soloist) is looking to partner up with Working Title on a new version of The Little Mermaid, based on Hans Christian Anderson's classic tale.
Wright’s Little Mermaid was written by Abi Morgan (Brick Lane) and was inspired by a Little Angel Theatre Company production that utilized puppets. Not sure how a production involving puppets can serve as inspiration for a live-action feature, but they must have seen something in there – be it in colors or tone. Wright doesn't come off as the kind of guy who's looking to make a kiddie flick either, so I'd expect his version of the Little Mermaid to be a little more serious and not include any lavish musical numbers with talking crabs and Jamaican accents.
A mermaid drama? Do you see it? Would you see it? Or will something like that taint the Disney classic?