New Line Cinema drop Jackson from 'Hobbit' film

'Lord of the Rings' director Peter Jackson has been told he will not be employed on 'The Hobbit', the next film adaptation of a JRR Tolkien novel.

New Line Cinema, with whom he has been in dispute about income from the first Rings film, was not using him, he said.

The director had refused to discuss a Hobbit film until the case was settled but New Line said it now wanted to move on as it had "limited time" to make the film. The Rings trilogy generated nearly $3bn in cinemas around the world.

Peter Jackson, a devoted Tolkien fan, said he had been removed from the Hobbit project by New Line, who also hold the rights to a second 'Lord of the Rings' prequel.

The Oscar-winning director said New Line would not allow him to make the films unless he dropped the lawsuit.