Will Peter Jackson direct The Hobbit movie or won’t he? That is the question.

For those wondering why on middle earth there would be any question about Jackson directing a movie version of The Hobbit given his achievement with the Lord of the Rings, here’s a little background to what must be a public relations nightmare for New Line studios.

In August 2005 Peter Jackson initiated legal proceedings against New Line over purported financial anomalies in accounting for the first movie of the Lord of the Rings trilogy, Fellowship of the Ring.

The war of words got ugly in January this year when a miffed Bob Shaye, head of New Line, declared that Jackson would not be directing The Hobbit movie “during my watch”. From which, one can deduce, Bob Shaye has been spending a little too much time in movie world. Hopefully someone has now put him straight that no one outside of the movies (saving George Dubya of course) really speaks like that...

New Line currently holds the rights to production of The Hobbit movie but these are due to expire unless full production begins before 2009. Failing that, the rights revert to The Saul Zaentz Company. In a vote of confidence in Jackson, producer Saul Zaentz said in November 2006 that the movie was definitely going to be made … with Jackson at the helm.

Under considerable pressure to develop the project before losing the rights New Line has talked to several high profile directors about taking on the job, most notably Peter Weir and Sam Raimi, director of the Spider Man films. Raimi seemed to be showing interest but recent indications are that he now has cold feet and, moreover, a humbled Bob Shaye has been attempting to mend bridges with Jackson.

From New Line’s perspective there were always going to be major stumbling blocks without Jackson as director. For a start, there would be no Weta Workshops, which means the special effects, and the very look of the world created on film, would differ from that established so successfully in the Rings trilogy. Perhaps more problematical for the studio is the loyalty the actors from the Rings movies feel for Jackson. Cate Blanchet, Viggo Mortensen, Orlando Bloom and Ian McKellan have all publicly declared an interest in returning for The Hobbit movie with the proviso that “Jackson is involved.” (Although I’m not sure what Cate Blanchet and Viggo Mortensen would be doing as their characters do not appear in The Hobbit).

But in the end Peter Jackson has so successfully marked the territory of Middle Earth from the Gray Havens to Mordor that my guess is no other director will be game to go near it.

In a further blow for New Line a US federal magistrate has just fined them US$125,000 for failing to produce potential evidence in the court case with Jackson and ordered the Studio to hire an outside document retrieval service to deliver the material.