Due to an ugly labor dispute, it was looking like Peter Jackson's two-part adaptation of The Hobbit was going to leave New Zealand  That no longer appears to be the case as New Zealand Prime Minister John Key announced that The Hobbit (and its $670 million budget) would be staying in his country.  You know a movie is a big deal to a country when they get the prime minister to hold on a press conference on it.  The New Zealand government is even introducing legislation "to clarify the distinction between independent contractors and employees as it relates to the film industry only."  That's how important these films are to the country.

Hit the jump for more concessions the government made in order to keep Middle-Earth in New Zealand, which is where The Lord of the Rings trilogy was famously shot.  Surprisingly, changing the name of the country to "Middle-Earth" wasn't one of them.  The Hobbit is set for release in 3D in December 2012 and December 2013.  The films star Martin Freeman, Richard Armitage, Rob Kazinsky, Aidan Turner, Graham McTavish, John Callen, and Stephen Hunter.

According to the New Zealand Herald, they're even changing the tax rebates for Warner Bros., which will mean up to an extra US$7.5m per movie for the studio, subject to the success of the movies.  And if that's not all, the government will offset US $10 million of Warner Bros' marketing costs as part of the strategic partnership.  That's right: New Zealand taxpayers are going to help pay to market The Hobbit.  However, the country will get to host one of the world premieres for the movies, so that's nice.

I couldn't agree with Prime Minister Key more when he says, "It's good to have the uncertainty over, and to have everyone now full steam ahead on this project."  Filming is slated to begin in February 2011.