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WELLINGTON (Reuters) - The New Zealand government vowed on Thursday to step in to try to keep filming of big budget "The Hobbit" movie in New Zealand as protestors took to the streets in a dispute among unions over the film.
As tensions escalated, The New Zealand Actors Equity on Thursday recommended lifting a boycott on "The Hobbit," that was imposed after complaints that the producers would not let the union negotiate a minimum wage and working conditions.
But it was unclear if the move had come too late as New Zealand filmmaker Peter Jackson -- whose blockbuster "Lord of the Rings" trilogy boosted the reputation of New Zealand's film industry -- said Time Warner Inc's Warner Bros would be in New Zealand next week planning to move the production offshore.
"It appears now we cannot make films in our own country - even when substantial financing is available," Jackson and his filmmaking partner and wife, Fran Walsh, said in a statement.
Prime Minister John Key, who offered earlier this month to act as a mediator in the dispute, said he would do everything he could to keep the two-movie project worth an estimated $500 million in New Zealand and protect the local film industry.
"I think we have a strong position, but the industrial action from the unions and the threat of industrial actions ... have substantially undermined the confidence that Warner Bros has in New Zealand," Key told Radio New Zealand on Thursday.
"The government will have to sit down and talk to them about what we can do to restore that confidence."
The New Zealand Actors Equity said it would start new talks with producers over conditions for performers.
"In an effort to re-establish stability in the New Zealand film industry, NZ Equity has recommended to all international performance unions that they rescind any forms of advice to their members that they not work on the feature film production 'The Hobbit,'" the union said in an online statement on Thursday.
Up to 1,500 protestors including film technicians and other film industry workers took to the streets of Wellington on Wednesday night, waving signs that read "Ireland is not Middle-earth" and shouting "Don't kill Bilbo."
This was a reference to the story's protagonist, Bilbo Baggins, a hobbit who lives in the land of Middle-earth with wizards, elves and other fantasy creatures.
Warner Bros. last week said it had finally given the green light to start filming two movies based on J.R.R. Tolkien's "The Hobbit," which was first published in 1937 and is the precursor to the "Lord of the Rings" trilogy.
The move ended months of speculation over the fate of the project, which has suffered a series of delays including the resignation of director Guillermo de Toro in May.
Economic Development Minister Gerry Brownlee told Radio New Zealand that the government would do everything it could to keep the films in New Zealand, aware of the money and jobs they would create for the local economy, but ruled out tax breaks for now.
The "Rings" movie trilogy grossed nearly $3 billion worldwide at box offices with the final chapter, "Return of the King," sweeping the Academy Awards in 2003 by winning in all of the 11 categories in which it was nominated, including best film.
Additional reporting by Adrian Bathgate; writing by Elaine Lies; Editing by Belinda Goldsmith