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Hobbit movies will be made in New Zealand

27 October 2010 Last updated at 11:49 BST

The Hobbit movies will be made in New Zealand after a deal was reached between film executives and the unions.

Warner Bros and New Line had considered taking the production elsewhere after acting unions threatened to boycott the films in a row over wages.

Making the announcement, Prime Minister John Key said he was "delighted" about the result, which he hoped would again promote "New Zealand on the world stage".