Lord of the Rings director Peter Jackson says he's been kicked off the movie adaptation of The Hobbit.

Jackson said he had been removed from the Hobbit project by New Line Cinema, which also holds the rights to a second Lord of the Rings prequel.

The Oscar-winning director said New Line would not allow him to make the films unless he dropped a lawsuit over income from the first Rings film.

Fans of Tolkien and the Lord of the Rings films have long called for a film version of The Hobbit which tells how Bilbo Baggins stole the ring from Gollum.

"We have always assumed that we would be asked to make The Hobbit and possibly this second film, back-to-back, as we did the original movies," an email from Jackson to TheOneRing.net fan website read.

Meetings with film executives had been planned, Jackson explained, but then New Line called his manager to tell him that the company "would no longer be requiring our services on The Hobbit and the prequel".

New Line was "actively looking to hire another film-maker for both projects", Jackson added.

"This outcome is not what we anticipated or wanted, but neither do we see any positive value in bitterness or rancour," he said.

A spokesman for New Line declined to comment.

Source: Press Release