The Hobbit set to be most expensive movie ever made

Costs for the adaptation of JRR Tolkein’s book are expected to reach a staggering £315 million

Hollywood’s take on JRR Tolkien’s The Hobbit could become the most expensive film ever made.

After more than a decade in development, the prequel to The Lord of the Rings is now expected to cost £315 million. This would make it about £125 million more costly than the third part of the Pirates of the Caribbean franchise, thought to have been the most expensive film yet.

It would also mean The Hobbit's final price-tag would be approaching twice that of the entire Lord of the Rings trilogy, which cost £177 million.

The story is being split into two parts. It is expected that Peter Jackson, the mastermind of the Lord of the Rings films, will be the director. Its budget has ballooned due to several years of delays, which have partly been caused by legal disputes.

New Line Cinema, which made the trilogy and has the rights to make The Hobbit, was engaged in a battle with MGM, which owns distribution rights.

Meanwhile, Christopher Tolkien, the last surviving child of the author, spearheaded a long-running dispute with the producers of the previous films. He claimed in a Los Angeles court that the Tolkien estate had been the victim of ‘Hollywood voodoo accounting’ and was owed £94 million.

The franchise is thought to have reaped£3.7 billion in profits. Mr Tolkien had threatened to withdraw permission for The Hobbit unless the estate received a bigger share.

If production begins soon, the first part of The Hobbit is due to open in December 2012, with the second following a year later. The four-hour epic will be shot in high-definition and 3D.

Many of the actors from the Oscar-winning Rings trilogy, including Sir Ian McKellen as Gandalf the wizard, and Andy Serkis as Gollum, are expected to return on much higher pay when filming starts in January.

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