Peter Jackson, New Zealand director of the Lord of the Rings Trilogy (FilePhoto)

Peter Jackson, New Zealand director of the Lord of the Rings Trilogy, the multiple-Oscar winning box office leviathan, will not be making The Hobbit or a second Lord of the Rings prequel, according a letter posted on LOTR website Theonering.net Wednesay.

In the letter, Jackson and his producing and writing partner Fran Walsh said they had received a call from an executive at New Line, the studio behind the three films, telling them that their services would not be required on either The Hobbit or a planned prequel to the original trilogy.

"Last week, Mark Ordesky (New Line exec) called Ken Kamins (Jackson's manager) and told him that New Line would no longer be requiring our services on The Hobbit and the LOTR prequel," the filmmakers wrote. "This was a courtesy call to let us know that the studio was now actively looking to hire another filmmaker for both projects."

The filmmakers said that New Line had decided to look for another director because of a financial dispute between the two parties. Jackson's production company sued New Line earlier this year, arguing it had not received its share of the income from the films.

Noting that just a few months ago MGM, which also owns part of the rights to The Hobbit, had publicly stated that Jackson would be making the film, the letter said there was even a meeting arranged to discuss the project.

A spokesman for New Line declined to comment citing company policy, and a Los Angeles representative for New Zealand-based Jackson was not immediately available.

Clearly disappointed with the news, Jackson wrote: "This outcome is not what we anticipated or wanted, but neither do we see any positive value in bitterness and rancour."

The Rings trilogy is one of the most successful films with the first two installments bringing in about 1.8 billion dollars worldwide and the third grossing more than 770 million dollars since its Christmas opening.

The trilogy of movies is based on Tolkien's fantastic tale of an epic war among wizards, sorcerers, elves, villainous orcs and friendly little hobbits of whom the novel's hero, Frodo, is one. It is Frodo who eventually saves the day. The Hobbit is a fairy tale-like story that Tolkien wrote before the Rings trilogy.

Editor: Donald