LOS ANGELES (AFP) — Oscar-winning "Lord of the Rings" director Peter Jackson has settled a feud with Hollywood studio New Line and will make two films based on J.R.R Tolkien's "The Hobbit," a statement said Tuesday.
The groundbreaking New Zealand director, whose trio of "Lord of the Rings" fantasy films have grossed more than three billion dollars since 2001, had ruled himself out of a return to Middle Earth earlier this year.
Jackson's decision came after he threatened to sue New Line in a row over royalties from the "Lord of the Rings," leading studio chief Bob Shaye to declare that the New Zealander would "never" make "The Hobbit."
However, a joint statement from Jackson, New Line and MGM on Tuesday said the legal feud had been settled and that Jackson and professional partner Fran Walsh would serve as executive producers on the two films.
There was no mention in the statement of whether Jackson would serve as director on the two films.
As with the "Lord of the Rings," the movies will be shot simultaneously before being released separately. Principal photography was likely to begin in 2009 before the release of the films in 2010 and 2011.
"I'm very pleased that we've been able to put our differences behind us, so that we may begin a new chapter with our old friends at New Line," Jackson said. "We are delighted to continue our journey through Middle Earth."
New Line co-chairman and co-chief Shaye expressed delight that Jackson and Walsh will be overseeing "The Hobbit."
"We are very pleased we have been able to resolve our differences, and that Peter and Fran will be actively and creatively involved with 'The Hobbit' movies," Shaye said.
"We know they will bring the same passion, care and talent to these films that they so ably accomplished with 'The Lord of the Rings' Trilogy."
Jackson's three-part adaptation of Tolkien's "The Lord of the Rings" made history when its final installment "The Return of the King" won the best picture Oscar in 2004, the first time ever that a fantasy film won the award.
"The Return of the King" won a total of 11 Oscars -- including best director for Jackson. The trilogy was also unique because it was filmed simultaneously on location in New Zealand, a risky strategy which could have been a costly failure had the first film in the franchise been unsuccessful.
Industry analysts said Tuesday they were unsurprised that the dispute over "The Hobbit" had been settled, given the massive revenues that the film would be likely to generate.
But Lew Harris, editor of Movies.com, said it was difficult to see anyone other than Jackson directing the latest adventures.
"The thing that made 'Lord of the Rings' work so well is that it was Peter Jackson's unique vision," Harris said.
"New Line have discovered with 'The Golden Compass' that not anybody can make a movie like this," he added referring to the studio's recent fantasy film starring Nicole Kidman which has struggled at the US box-office.
Harris also questioned the wisdom of stretching the story over two films. "I can't imagine what they are thinking," he told AFP. "It's an idiotic decision."
"The Hobbit" is set in Middle Earth and is generally regarded as a prelude to the "Lord of the Rings" trilogy.
The book tells the story of how the hobbit Bilbo Baggins sets off on a quest accompanied by 13 dwarves and Gandalf the wizard to confront the dragon, Smaug, who has accumulated a massive treasure trove inside the Lonely Mountain.
The adventures include the tale of how Bilbo takes possession of the magic ring at the center of the later "Lord of the Rings" books, when he discovers it by chance in Gollum's lair.
An animated television film of "The Hobbit" was released in the United States in 1977, and included veteran director John Huston providing the voice for Gandalf.
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