'Hobbit' movie in jeopardy as director Guillermo Del Toro quits

If you thought reading a JRR Tolkien novel was time-consuming, try turning one into a film. Two years and hundreds of painstakingly designed monster costumes after he started work on The Hobbit, the Mexican director Guillermo Del Toro has suddenly quit, complaining about endless delays in getting his eagerly-awaited film green-lit.

In a move that sent a shockwave through the ranks of "Middle Earthers" and was greeted with dismay by his own fans, Del Toro said he reluctantly decided to step down after growing tired of the continued uncertainty about when The Hobbit will begin shooting, and the future of the studio that will release it.

Since 2008, Del Toro has enjoyed a nomadic lifestyle comparable to that of Bilbo Baggins, commuting every week from his home in Los Angeles to New Zealand, where Peter Jackson is making a two-part film version of The Hobbit after producing the Lord Of The Rings trilogy there.

But although Del Toro has finished work co-writing a script, and has helped design many of the sets and costumes, the film is unable to get itself off the ground until its studio, MGM, can resolve financial issues that has left it $3.7bn [£2.55bn] in debt.

The troubled studio has been up for sale for months, though is currently struggling to attract a sufficiently deep-pocketed buyer.

"In light of ongoing delays in the setting of a start date for filming The Hobbit, I am faced with the hardest decision of my life," Del Toro told a Tolkien fan website www.theonering.net. "After nearly two years of living, breathing and designing a world as rich as Tolkien's Middle Earth, I must, with great regret, take leave from helming these wonderful pictures."

His resignation increases the likelihood of the two films failing to be ready in time for their supposed release dates of December 2012 and December 2013, leaving a hole in the film industry's finances for those years. The last instalment of Lord Of The Rings, released in 2003, made $1.1bn. When both inflation and the increased cost of tickets for 3D film screenings are factored into calculations, The Hobbit can expect to generate even more.

Last week, Del Toro, who is best known as the director of Pan's Labyrinth and the Hellboy franchise, hinted at his frustration at delays with the project. He told a news conference that The Hobbit remained in limbo until the financial crisis at the MGM studio, which shares financing rights to the two titles with New Line Cinema, was completely solved. "It's not green-lit," Del Toro said. "That's categorical. We have been caught in a very tangled negotiation. There cannot be any start dates until the MGM situation gets resolved ... They do hold a considerable portion of the rights."

He revealed that all of the fantasy film's creatures and much of its scenery had been created. "We've designed the sets and the wardrobe," he added. "We have done animatics and planned battles sequences. We are very, very prepared for when it is finally triggered."

Jackson said he was sad to lose the collaborator he hired in 2007, adding: "The bottom line is that Guillermo just did not feel he could commit six years to living in New Zealand, exclusively making these films, when his original commitment was for three years."

Jackson, who has been trying to get The Hobbit off the ground since 1995 (though work began in earnest only in late 2007), is searching for a replacement. Leading contenders include the Spider-Man director Sam Raimi and Neil Blomkamp, who made last year's Oscar-nominated sci-fi hit District 9.

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