An Australian union's call for a boycott of Peter Jackson's The Hobbit films is based on "duplicitous and inaccurate" claims, the chief executive of a leading production company says.

The Media, Entertainment and Arts Alliance (MEAA) said makers of The Hobbit had refused to enter into a union-negotiated agreement and advised members not to accept work on the feature film.

Hollywood stars such as Sir Ian McKellen, Cate Blanchett and Hugo Weaving - all reportedly taking part in the Lord of the Rings prequel - supported a boycott, according to the union.

MEAA national director Simon Whipp said actors could be let go with just one day's notice, and there were concerns producers would not pay fees in standard union contracts, such as payments from DVD sales.

But the union's claims were duplicitous and inaccurate and made by an organisation with no legal standing in New Zealand, South Pacific Pictures chief executive John Barnett said.

"The MEAA has been struck off the register (of NZ incorporated societies) for failing to file any reports in the last three years, which is one reason that the production company can't enter into any agreement with it.

"The Australian union has absolutely no interest in what happens in New Zealand."

The claim that actors were at the mercy of production companies was a complete misrepresentation as there were absolute guarantees about working conditions which had been in place for the past 15-20 years, Mr Barnett told Radio New Zealand.

Executive producer of the films Sir Peter Jackson said in a statement that he was "not anti-union in the slightest" and he always honoured actors' union conditions.

"I can't see beyond the ugly spectre of an Australian bully-boy using what he perceives as his weak kiwi cousins to gain a foothold in this country's film industry. They want greater membership, since they get to increase their bank balance."

"If The Hobbit goes east - Eastern Europe, in fact - look forward to a long dry big budget movie drought in this country," Sir Peter said.

Mr Barnett agreed that losing the films to Eastern Europe was a real risk as production company MGM didn't want any trouble and just wanted to get it done.

Mr Whipp said MEAA performers would meet in Auckland tomorrow night to assess the situation.

New Line and MGM studios are financing the films. New Line declined to comment and MGM were unavailable, The BBC reported.

The setback was the latest to hit the movies, which have been in the pipeline for several years and are yet to get the green light.

Filming was originally scheduled to start last year but had been delayed until next year.

Mexican-born director Guillermo Del Toro was originally to direct the movies but pulled out in June because of the delays.