The New Zealand government on October 27 maintained its stake in Peter Jackson's two-part fantasy epic by promising to rewrite the country's labour laws and offering a $25-m tax break to the Hollywood studio Warner Bros. The last-ditch deal ends weeks of protests and uncertainty when it looked as if the production — a prequel to the ‘Lord of the Rings' trilogy — would move elsewhere.

Prime Minister John Key emerged from two days of talks with studio executives to announce the decision. “I am delighted we have achieved this result,” he said. “Making the movies here will not only safeguard work for thousands of New Zealanders, but it will also allow us to follow the success of ‘The Lord of the Rings'.” Representatives from Warner Bros had flown to Wellington to resolve a dispute over pay and conditions that threatened to derail the production. Jackson's ‘Lord of the Rings' trilogy earned nearly $3-bn at the global box office and helped to establish New Zealand as a destination for film-makers and tourists alike.

Economists suggested that the loss of ‘The Hobbit' could cost $1.5-bn in lost revenue. — © Guardian Newspapers Limited, 2010

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