'The Hobbit' will be shot in New Zealand following a deal between the country's government and Warner Bros. studios.
'The Hobbit' will be filmed in New Zealand.
The 'Lord Of The Rings' prequel - which was looking likely to move to Eastern Europe, England or Ireland after problems with production in New Zealand - will stay in the country after a deal was reached with the government and studio Warner Bros. over increased tax breaks and changes in labour law.
New Zealand's Prime Minister John Key confirmed both parts one and two will be shot in the country in a move which would "safeguard" jobs.
He said in a statement: "I am delighted we have achieved this result. Making the two 'Hobbit' movies here will not only safeguard work for thousands of New Zealanders, but it will also follow the success of the 'Lord of the Rings' trilogy in once again promoting NZ on the world stage."
One cast-member who will be delighted with the news is Andy Serkis - who has played Gollum in the previous three 'Lord of the Rings' films - who yesterday (26.10.10) revealed it would be a "great shame" if the film didn't stay in New Zealand.
He exclusively told BANG Showbiz: "I think it would be an awful shame if it wasn't shot in New Zealand. I think people want it to be made in New Zealand. There is a mystique about that place. It's important. And also there are lots of livelihoods dependent on it, they worked really hard on the last ones. It would be a great shame for the New Zealand film industry."
'The Hobbit' - which has cast Martin Freeman as lead character Bilbo Baggins - has undergone a host of problems this year.
As well as the original director Guillermo Del Toro leaving the project, to be later replaced by Peter Jackson, financing problems have halted production and Freeman had difficulties signing because of his commitment to UK TV show 'Sherlock'.
Unions also called for a boycott by actors claiming the film's producers would not guarantee payment conditions or cancellation fees, but that was later called off.
'The Hobbit' is expected to begin shooting in February 2011.