Film studio blacklists Jackson after row over 'Hobbit' adaptation

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The director of The Lord of the Rings, Peter Jackson, was bluntly told by the studio which produced the film trilogy that he had been blacklisted from working on any of their films, including their next adaptation of JRR Tolkien's The Hobbit.

In a move likely to disappoint fans of Jackson's epic works - which took seven years to complete - the head of the film studio which owns the rights to the novel, New Line Cinema, accused the New Zealand director of arrogance and said he would make sure he never made another film with the company.

Jackson is currently suing the firm over money he claims he is owed following the production of the first film in the trilogy, Fellowship of the Ring.

Its co-chairman Robert Shaye said collaboration with Jackson would "never happen on my watch" in an interview with the website Sci-Fi Wire, adding: "I do not want to make a movie with anybody who is suing me."

The row between the director and the studio has led to "leading actors" from the three films snubbing the studio's 40th anniversary party, the website claimed.

When work began on The Fellowship of the Ring, released in 2001, the film was not considered a guaranteed success. But by the time the third film, The Return of the King, was released in 2003, the trilogy had taken almost $3bn at box offices worldwide and the works led to a massive resurgence of interest in both The Lord of the Rings and JRR Tolkien's other works.

Jackson's production company began legal action against the studio after claiming that a partial audit of The Fellowship of the Ring had signalled financial anomalies. Mr Shaye, who was executive producer of the films, denied that the company owed Jackson any more money. He added: "He got a quarter of a billion dollars paid to him so far, justifiably, according to contract, completely right, and this guy ... turns around without wanting to have a discussion with us and sues us and refuses to discuss it unless we give in to his plan."

On the apparent decision of stars of the films not to attend the studio's anniversary celebrations, Mr Shaye said that he was "incredibly offended" at the move, which he said came about "suddenly, I'm guessing because of Peter's complaint". Jackson first spoke of the row in November last year, when he posted a message on the popular website for Tolkien enthusiasts, confirming that New Line has told him he would not be asked to direct The Hobbit, in which the character Bilbo Baggins takes the ring from Gollum.

Fans posted outraged messages on websites when he told them that the studio was "going to have to find another director" as his production company, Wingnut Films, would not discuss making another film until the lawsuit was resolved. New Line needed to press ahead with completing the film as its rights on The Hobbit had a limited time option, he added.

The saga started to take on the complexity of a Tolkien fantasy because of the involvement of the distributor of the films, MGM. In November an MGM spokesman said that "the matter of Peter Jackson the Hobbit is far from closed".

In a statement yesterday, Jackson said that his issue with New Line had "only ever been about their refusal to account for financial anomalies" following the audit of the first film.

He added that he had always had the highest respect for Mr Shaye and that "it was regrettable" he had "chosen to make it personal".