The issue over where and when The Hobbit will shoot looks likely to drag on given the studio’s announcement today.

New Line issued a statement in which it said it was considering alternative locations to New Zealand after it emerged yesterday [20] that the unions were ending their boycott of the two back-to-back projects following a debate over terms and conditions.

Today’s statement follows an angry missive from director Peter Jackson and his partner Fran Walsh that came out of New Zealand earlier in the day, in which they castigated the unions for their stance. Warner Bros is financing the projects and is yet to settle on a location.

The New Line statement reads as follows: “Recent reports that the boycott of The Hobbit was lifted by unions a number of days ago and that Warner Bros asked to delay this announcement are false.

“It was not until last night [20] that we received confirmation of the retractions from SAG, NZ Equity and AFTRA through press reports. We are still awaiting retractions from the other guilds.

“While we have been attempting to receive an unconditional retraction of the improper Do Not Work Orders for almost a month, NZ Equity/MEAA continued to demand, as a condition of the retractions, that we participate in union negotiations with the independent contractor performers, which negotiations are illegal in the opinion of the New Zealand Attorney General.

“We have refused to do so, and will continue to refuse to do so. The actions of these unions have caused us substantial damage and disruption and forced us to consider other filming locations for the first time. Alternative locations are still being considered.”