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SYDNEY (Reuters Life!) - New Zealand Prime Minister John Key has offered to take a starring role in resolving a dispute between actors and producers of the long-awaited movie "The Hobbit" to ensure filming stays in the country.
After years of delays, Hollywood looked like it was finally close to producing a movie based on J.R.R. Tolkien's "The Hobbit" as a two-part prequel to the blockbuster "Lord of the Rings" trilogy made by New Zealander Peter Jackson
The Los Angeles Times reported sources on Saturday saying Time Warner Inc's Warner Bros, its subsidiary New Line Cinema and Metro-Goldwyn Mayer hoped to start production in January and to release the first Hobbit film in 2012 and the second in 2013.
But industrial action by actors' unions threatens to derail the project in New Zealand with The Media, Entertainment and Arts Alliance (MEAA) calling for a boycott of the film. The MEAA says the producers will not allow the union to negotiate a minimum wage and working conditions for its members.
The New Zealand Actors' Equity is allied with the Australia-based MEAA.
Jackson has accused the MEAA of being an "Australian bully boy" and says its agenda is "based on money and power."
Key, however, on Monday offered to step in as a mediator for the sake of the New Zealand film industry, which boomed after Jackson filmed the Lord of the Rings trilogy there.
"I would be very, very concerned if it moved offshore," he told Television New Zealand.
"This is a NZ$3 billion ($2.2 billion) industry. It employs a lot of people. It's great for New Zealand. It's a great way for marketing New Zealand."
The Hobbit co-producer and co-writer Phillippa Boyens told Radio New Zealand that film industry players from Australia, Canada, Scotland and Ireland were all pushing to take the project. Jackson has suggested Eastern Europe was also a potential location.
Boyens said the dispute had damaged New Zealand's film reputation and "thrown doubt on how stable our industry is in terms of industrial relations."
Recent studio films made in New Zealand include "Avatar" and "X-Men Origins: Wolverine."
The New Zealand Council of Trade Unions President Helen Kelly met Jackson last week but has declined to comment on reports that the dispute is nearing a resolution.
Production of The Hobbit has suffered a series of delays including the resignation of director Guillermo del Toro who quit in May as the uncertain financial future of movie studio MGM put a question mark over the two-movie project.
Last week a fire damaged a Wellington studio which was used for filming many of Jackson's movies including many special effects for the "King Kong" and Lord of the Rings movies.
Writing by Belinda Goldsmith, Editing by Steve Addison