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'Lord of the Rings' director Jackson says he lost rights to make 'The Hobbit'

New Zealand director Peter Jackson, who scored worldwide successwith his "Lord of the Rings" trilogy, said Tuesday he will not bemaking the movie based on J.R.R. Tolkien's novel "The Hobbit" or aplanned prequel.

In a letter posted on a Lord of the Rings Web site, Theonering.com.,Jackson and partner Fran Walsh said a top executive from LosAngeles-based New Line Cinema had called to tell them the studio wasmoving ahead with "The Hobbit" movie without Jackson.

"Last week, Mark Ordesky called Ken (Kamins, Jackson's manager) andtold him that New Line would no longer be requiring our services on TheHobbit and the LOTR 'prequel,'" Jackson wrote.

"This was a courtesy call to let us know that the studio was nowactively looking to hire another filmmaker for both projects," headded. New Line Cinema holds the rights to produce "The Hobbit," andMetro-Goldwyn-Meyer the rights to distribute it.

A spokesman from Wingnut Films, Jackson's production company in theNew Zealand capital, confirmed to local media Wednesday that the letterwas genuine. He spoke on his standard condition he not be named.

The announcement comes amid an ongoing dispute between Jackson'sWingnut Films and New Line Cinema over the amount Jackson was paid for"The Fellowship of the Ring," including DVD payments.

While Jackson has not said how much he believes he was underpaid,The New York Times last year quoted his lawyers as saying it was asmuch as US$100 million. He is suing New Line Cinema over the shortfall.

The Dominion Post newspaper in the New Zealand capital Wellingtonquoted Jackson as saying that because he and Walsh would not discussthe movies "until the lawsuit is resolved, the studio is going to haveto hire another director."

"We are very sorry our involvement with 'The Hobbit' has ended this way," the pair added.

Plans for Jackson to make a US$128 million movie version of thesci-fi video game Halo were also scuppered this month after backers20th Century Fox and Universal Pictures pulled out.

Jackson's 'Lord of the Rings' trilogy grossed nearly US$3 billion at box offices worldwide.