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Brooklyn's largest film studio - host to "Spider-Man 3" and Spike Lee's "Inside Man" - will nearly double in size to better compete with Hollywood, city officials said yesterday.

Steiner Studios, part of New York's so-called Hollywood East, plans to expand its studio space to 600,000 square feet by renovating a seven-story building in the Brooklyn Navy Yard.

The expansion will put the two-year-old studio in the same league as many of its Tinseltown competitors.

"This is a deeply significant step for both the film and TV production industry in New York City as well as the continued development of the Brooklyn Navy Yard," Deputy Mayor Dan Doctoroff told the Daily News.

Doctoroff said the expansion will add another 550 jobs to the Navy Yard, which already saw the creation of 800 jobs in October through the construction of retail and industrial space.

"We have always had a vision in mind of creating a full-blown media campus to be on par with any of the major lots in Hollywood," said a source close to Steiner Studios.

Since opening, Steiner Studios has lured more than a dozen TV shows and movies to New York, furrowing brows in Hollywood, where movie production dropped 7.5% last year, according to the Entertainment Industry Development Corp.

The expansion will create a 289,000-square-foot Washington Ave. "media campus." The building will house businesses with ties to the movie and TV industries, including stylists and art designers, a source said.

Steiner is the city's second-largest film studio, behind only Silvercup Studios, the production home of "The Sopranos" and "Sex and the City," in Long Island City, Queens.

The number of film, TV and video productions in the city surged to an all-time high last year, according to the city Office of Film, Theatre and Broadcasting, in part because of tax incentives to film in the five boroughs.