Torchwood will be about a group of investigators tracking alien activity and solving human crime in present day England. It will feature John Barrowman as Captain Jack Harkness, from Doctor Who, and will be shown post-watershed on BBC3. Russell T Davies describes the flavour of it like this:
"Torchwood will be a dark, clever, wild, sexy, British crime/sci-fi paranoid thriller cop show with a sense of humour - the X Files meets This Life."
More details can be found via the BBC link above, and this article in The Independent gives in-depth information.
Torchwood will also be referenced in the Doctor Who Christmas Special, and Series Two of Doctor Who.
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