As best I've heard, Jackson has said repeatedly he'd really rather not do it. With the whole fucked up rights situation thanks to MGM I fear it may be years before this thing actually goes down. And then it could start to get to a point where Viggo and McKellan couldn't realistically reprise their roles.

I could see the likes of Alfonso Cauron though pulling this off.

I'm glad Del Toro's off the project. That way he can work on films that are his instead of spending 6 years to develop another's property.

I'm glad he's off, too. I don't know if someone's already said this, but it's always seemed to me that the only reason he was given this movie was because he was kind of fat like Peter Jackson.

i am sad. i think he would have done a great job.

this is very sad news. what's to become of the making of this??

Didn't Del Toro already spend a lot of time on this project? What a waste..

Actually AICN has a story today that Jackson has stated if he can't find a quality name, he's now open to indeed directing it himself. Though they go on to point out he is already signed for another project or two at different studios, so contracts could be a problem.

Breaking: 'The Hobbit' Moving Forward

The long-delayed 'Lord of the Rings' prequel will start production in February with Peter Jackson directing

By Sharon Waxman
TheWrap.com

"The Hobbit" has been greenlit and will start production in February, an individual close to the production has told TheWrap.

Bing: More on the 'Hobbit' movie

As TheWrap previously reported, Peter Jackson has agreed to direct the film in addition to producing and writing the two-part project.

In the agreement completed this week, Jackson's deal was finalized and MGM and Warner Brothers agreed to greenlight the project.

Sets have already been built in New Zealand, and actors, including Sir Ian McKellen, have been on hold for months.

Martin Freeman has been rumored to play Bilbo Baggins.

Production will begin in February.

However, the individual said that labor issues related to the production have still not been resolved and that negotiations will continue with the Screen Actors Guild.

The greenlighting means that millions of global fans for the revered J.R.R. Tolkien property can look forward to a prequel to "The Lord of the Rings," which was one of the most successful movie franchises in movie history.

Jackson was already on board to write and produce "The Hobbit." But because of financial turmoil at MGM, which owns half of the franchise together with Warners' New Line Cinema, the project became one of the most torturous movie projects in Hollywood history.

Great fuckin news

The sets had been abandoned..good to see this is back on.

This makes me happy

it's been rumored about forever, and so many seemed to want it, now it's official -- Martin Freeman as Bilbo!

Superb casting. Very happy with it!

He'll do..still think McEvoy(James) woulda been a better Bilbo

martin freeman is perfect. it also says that richard armitage is thorin oakenshield. his turn as the sheriff in the bbc's recent robin hood was the best part of the show.

Is that him? ah thats cool, hes a good actor, played that sherrif really well, like you really hated him. glad hes turning up.

some unknown irish fella is in it..hes been in one tv show here. cant vouch for him.

whoops. no, it's not him. it's the guy who played gisborne. cool too, but i'm considerably less excited.

Yea I mean I feel like I've been hearing lots of fans dropping Freeman's name for Bilbo immediately after the news hit that these were actually going to get made, however many years ago that was. (well, and once I suppose enough of the purists finally got over the idea that Ian Holm simply was not going to happen)

Shopped version of what he may look like as Thorin Oakenshield