There is good news and there is bad news.

First of all, fans of The Lord Of The Rings trilogy on-screen, the bad news is that Peter Jackson will not be directing The Hobbit.

The good news is that there actually will be a cinematic adaptation of the Hobbit, backed by LotR makers New Line Cinemas.

It is welcome news after a major row between Jackson, New Line and MGM over the rights of JRR Tolkien's Hobbit -- The Guardian quotes New Line chairman Bob Shaye as saying, in January, that Jackson would 'never make any movies with New Line Cinema again while I'm still working for the company.'

Things have smoothed over since, and how.

According to the new deal, Jackson and his partner Fran Walsh will serve as executive producers on the two Hobbit films, with complete creative control. The New York Times mentions that the two exec-producers will share with New Line the right to approve 'all creative elements' including the director, screenwriter, script, cast and filming location.

Jackson, working on The Lovely Bones through 2008, will then start work on Tintin, which he's making with Steven Spielberg [Images]. Sam Raimi, the man behind the Spider-Man franchise, has expressed interest to direct The Hobbit.

The Hobbit films will be shot back to back in 2009 and release in 2010 and 2011.

Photograph: Frazer Harrison/Getty Images