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Both movies would exist filmed entirely in New Zealand, whither the Oscar-winning Tolkien "Lord of the Rings" trilogy was shot.

Mexican film-maker del Toro and the Hobbit films' executive producer Peter Jackson released distinct parts of the latest project during an hour-long conduct one’s self Internet chat with fans.

Del Toro said "Lord of The Rings" stars McKellen and Andy Serkis (Gollum) would go for the Hobbit films but actors for new characters were not over and above decided.

Jackson said Hobbiton would be rebuilt "bigger and even better than it was" in the "Lord of the Rings."

"It is unlikely we will need at all locations outside of New Zealand which has always been the finished Middle Earth," Jackson said.

"There is nothing yet that Tolkien has described that we haven't managed to discovery in this amazing minute country and I expect 'The Hobbit' to be no different."

Del Toro was confirmed similar to director in conclusion month after the project was given the go-ahead when Jackson and Hollywood workshop New Line ended a lengthy quarrel over dividends from the "Lord of the Rings" series.

The trilogy brought in nearly three billion dollars in global box office takings, not counting DVD sales, and the movies between them won 17 Oscars.

In 2004, the last installment "The Return of the King" was awarded the most profitably picture Oscar, the first time ever that a fantasy film won the award.

"The Hobbit" is prize in Middle Earth and is a prelude to the "Lord of the Rings" trilogy.

The book tells the invention of how the hobbit Bilbo Baggins sets off on a quest accompanied by 13 dwarves and Gandalf the wizard to confront a dragon.

Pre-production work on the films will begin in 2009 and the films faculty of volition be shot back-to-back, beginning in 2010. "The Hobbit" is set to be released in December 2011 and the second as thus far untitled film in December 2012.