Hobbit on as peace comes to Hobbiton

Production of The Hobbit movies is back on track after a row that threatened to see filming shifted from New Zealand to eastern Europe.

Peter Jackson's Lord of the Rings trilogy depicted a clash between the forces of good and evil, but a powerful confrontation of a different kind has hit production of the series' two planned prequels.

It was a face-off between the Hollywood studio Warner Bros. and the government of New Zealand. Only after two days of intense negotiations did the battling sides find the common ground needed to keep production of The Hobbit, based on JRR Tolkein's fantasy novel, in the same country that provided the backdrop for the LOTR movies.

In recent weeks, acting unions had threatened to boycott Jackson's films in a row over terms and conditions. They wanted actors to be classed as employees rather than independent contractors, entitling them to sick days and holiday pay. The Kiwi director responded by announcing plans to move The Hobbit to eastern Europe. The news was met with dismay not just by fans, but by members of New Zealand's fledgling film industry, who were concerned about losing thousands of jobs if the US$500 million (Dh1.8bn) production went overseas.

Not only did Warners succeed in forcing a change in New Zealand's labour law, confirming the actors' status as freelancers, but the country's government pledged $15m in tax rebates to the filmmakers and agreed to shoulder $10m for publicity.

After years of hold-ups, The Hobbit is finally expected to go into production next February with the British actor Martin Freeman playing Bilbo Baggins. The Hobbit: Part 1 is scheduled for a December 2012 release… not holding one's breath is still strongly advised, however.