New Zealand director Peter Jackson has released a statement telling fans that he will not be directing 'The Hobbit', which is due to be the next film adaptation of a JRR Tolkein novel.
Jackson directed the blockbusting 'Lord of the Rings' trilogy for New Line Cinema.
He and his wife and fellow producer, Fran Walsh, are currently in dispute with New Line about income from the first 'LOTR' film.
Jackson's production company, Wingnut Films, filed a lawsuit early 2005, disputing licensing deals and the calculation of revenue from the DVD sales of 2001's 'The Lord of the Rings: The Fellowship of the Ring'.
He had refused to discuss a film of 'The Hobbit' with New Line until the case was settled.
New Line are now actively looking for another director for that film and for another proposed 'LOTR' prequel.
The other two films in the trilogy are 2002's 'The Lord of the Rings: The Two Towers' and 2003's final installment, 'The Lord of the Rings: The Return of the King', which won 11 Oscars including Best Film and Best Director.