The 39-year-old actor had to pay £1 every time he swore while shooting 'The Golden Compass' and his 13-year-old co-star Dakota Blue Richards made sure everybody adhered to the rules.
He said: "It was worth every penny. It cost me a lot of money but it was good. I had to pay a small fortune.
"It became a joke after a while - sometimes Dakota would be on set and you wouldn't know it and you would hear 'It's another £1.' "
Daniel - who plays hero adventurer Lord Asriel in the movie based on Philip Pullman's hit book 'Northern Lights' - insisted working with a young star was an enjoyable experience.
He added to Scotland's Daily Record newspaper: "I get big kick out of working with children because you've got to keep them enthused and it's a long day.
"You have to keep them amused and their energy levels go down but Dakota learned quickly and I teased her a lot to get her going, so we could bounce off each other."
The British star - who was reunited with his 'Casino Royale' co-star Eva Green for the film, which also stars Nicole Kidman - also joked he had it written into his contract that Eva must be in all his movies.
He quipped: "Eva is going to be in every movie I make from now on. It's contractual."