Many experts, myself included, believe that this Hobbit fiasco could cause long-lasting negative effects to the New Zealand film and television industry.
Yesterday I was told by an insider that representatives from Warner Bros were flying to New Zealand next week to arrange moving the filming elsewhere.
Peter Jackson later confirmed this that evening when he appeared on Close Up.
For those of you who are unaware, this dispute has centred on the fact that the New Zealand Actors' Equity, controlled in Australia, advised its members not to accept work on the two-part adaptation of the J. R. R. Tolkien novel after the film-makers refused to enter into a union-negotiated agreement.
There has been a mixed response from the nation but it seems most believe that these actors, many of whom are overrated, are overreacting and biting the hand that feeds them.
As a sexually active member of the TV industry I can say that people are starting to talk, and word on the street is that more productions may consider moving their operations offshore if these actor types don't "pull their heads in".
My sources also tell me that many of New Zealand's top TV shows - such as Shortland Street, Motorway Patrol, The ITM Fishing Show and Marae - have been approached about filming in Bulgaria.
Our top drama, Shortland Street, of course is a breeding ground for talent and anyone who is anyone in the New Zealand acting scene probably got their start on that show.
And although shows such as Motorway Patrol and Police Ten Seven are considered reality shows, what most people don't know is that many of the people who appear on them are paid actors.
If you are struggling to tell who is and isn't an actor when watching New Zealand TV, a good rule of thumb is: "If they are not pixilated they are a paid actor, and if they are pixilated then they are not."
There are, of course, exceptions to this rule as many of the people who appear unpixilated on shows such as Shortland Street cannot really be classified as actors.
If shows like Motorway Patrol and Shortland Street are filmed in Bulgaria next year, Bulgarian actors will naturally play all the major roles.
The voices will then be dubbed before the tapes are sent back to screen here.
There is an extra cost associated with this but one top producer, who prefers to remain nameless, says "it is a cost they are willing to pay rather than deal with those prima donna actor types back in Grey Lynn".
But it is, of course, the movie industry that is most affected because of this unnecessary industrial dispute.
Besides The Hobbit, a number of other movies slated to be shot in New Zealand have been put on hold, including a two-part trilogy about Bigfoot.
My sources tell me that Bigfoot Fully Loaded and Bigfoot Re-born will be shot in Bulgaria.
Closer to home, an upcoming movie on the life of Sir Edmund Hillary has taken on a strange twist. The Himalayan summit scenes not involving actors will be shot on Mt Cook, but key scenes about Sir Edmund living in New Zealand will be shot in Nepal, because it is cheaper.
An insider at Weta studios told me that they have a potential solution to the actor problem and this involves digitally re-editing footage from the Lord of the Rings trilogy to make new scenes for The Hobbit.
He says nowadays they can pretty much copy somebody's Facebook profile photo and turn it into a walking, talking actor capable of delivering Qantas award-winning performances.
But what about the work that has already gone on for The Hobbit? Hobbiton has already been partly built. My insider says there are already plans under way to convert the little village into state housing for cash strapped "little people" or New Zealand's financially and vertically challenged.