Key Points:

The Brits are to beat Kiwi-born director Peter Jackson in creating the next Lord of the Rings movie.

But the new film won't have the $166 million budget the other movies had or the backdrop of green New Zealand pastures and snowy mountains.

An amateur film-maker from England is digging into her own pocket, appealing to sponsors and has hired several actors willing to work for free to make a not-for-profit movie inspired by J.R.R. Tolkien's fantasy novels.

Born of Hope has been touted as a fan film but director Kate Madison is trying to shake off the term as she says it brings the illusion of "a bunch of teenage guys getting together holding shaky cameras on their shoulders".

The movie is set before the Jackson-directed trilogy and follows Arathorn and Gilraen - parents of Aragorn, a main character in all three films - from their first meeting through a turbulent time in their people's history.

The story stems from a couple of paragraphs written by Tolkien in the appendices of The Lord of the Rings but Madison, with the help of an American writer, have made up the bulk of the script.

"I'm the writer, director and the producer of this movie," she told the Herald from her home in Cambridge, England. "But if you want to break it down I'm also everything in between - stylist, head of wardrobe. This movie is my life at the moment."

Madison - who also plays the character of Elgarain, a character not created by Tolkien but inspired by his work - first had the idea of doing a Lord of the Rings movie in 2003 after seeing an advertisement for a Tolkien fan film-making competition.

The 29-year-old put out a casting call and received more than 100 CVs back. But she soon realised how much work she had created for herself and put off doing the movie. She picked it up again in 2006 after making her directing debut in a low-budget film Into the Darkness.

Born of Hope has a core cast of about 15 but Madison says more than 100 minor characters and crew have helped out so far.

Jackson is reported to have had a budget of US$94 million ($166 million) for each of his three movies but Madison hopes Born of Hope will cost no more than £25,000 ($65,500). Most of the props are borrowed and the actors turn up when they are not doing paid work.

Jackson's trilogy was shot in 150 locations around New Zealand, but much of the shooting for Born of Hope is being done in West Stow, Suffolk. Parts are also being filmed in Epping Forest, near London, for some of the Middle Earth locations and Madison is also hoping to film in Snowdonia, a North Wales national park.

Because of copyright rules, no money can be made from the unlicensed film. People will be able to download it from the internet once it is made. Madison hopes to release the film at Ring Con, a fantasy convention in Germany, in October next year.

Jackson is the co-writer and executive producer of the film version of Tolkien's The Hobbit, set to be released in 2011.

Madison has been given the thumbs-up from Wellington's Weta Workshop director Richard Taylor, who created all the props for the trilogy. He left a message on the film's website saying: "Amazing stuff. It's incredible to see what craftsmanship, sensitivity and attention to detail is being brought to bear on this ambitious project.

"Everything so far looks amazing and I can't wait to see the finished project."