Producer: Jackson will make 'Hobbit'

Peter Jackson will direct The Hobbit movie, according to a producer whose company will soon own rights to the book.

The Lord of the Rings director said last week that bosses at New Line Cinema had told him he was "no longer needed" for the prequel and another possible project in the set.

But producer Saul Saentz, maker of One Flew Over The Cuckoo’s Nest, told The Sun that New Line's contract would soon fall to him, as he owns the screen rights to Tolkien Enterprises.

“[The Hobbit] will definitely be shot by Peter Jackson," he declared. “Next year, The Hobbit rights will fall back to my company.

“I suppose that Peter will wait because he knows that he will make the best deal with us. And he is fed up with the studios.

“To get his profit share on the Rings trilogy, he had to sue New Line," he continued. "With us, he knows that he will be paid fairly and artistically supported without reservation.”