The actors' union pushing for collective contracts for actors in New Zealand says it is "disappointed" in Sir Peter Jackson's refusal to negotiate terms and conditions for Hobbit actors.

It warns the stalemate - where international actors reportedly including A-listers like Sir Ian McKellen and Cate Blanchett had been urged not to sign up to the film - will continue.

"Until the production gets in a room and starts negotiation, (the International Federation of Actors) have advised members not to hold and not to sign non-union contracts. It's completely in the hands of the production company to end this, all we want is a meeting," NZ Actors Equity organiser Frances Walsh told NZPA.

Through a spokesman, Sir Peter said he could not meet with the union, as any negotiations would impact on all New Zealand producers, "and that can't happen".

The spokesman, Matthew Dravitzki, said the union needed to negotiate with New Zealand's Screen and Development Association, SPADA, over its demands for collective bargaining on New Zealand films.

Ms Walsh said the union had been trying to negotiate a standard industry contract with SPADA for 18 months, to replace current non-binding guidelines for actors, but SPADA had refused, offering only to renegotiate the guidelines.

"Performers don't want to renegotiate guidelines... these guidelines have been in place for years and over the past 10 years, performers terms and conditions have degraded and degenerated. There is no force in a guideline."

SPADA's chief executive Penelope Borland said the association was trying to reach the union to find a way forward over the Hobbit movie, after Sir Peter said he could not enter such discussions, but had not yet been successful.

"We are trying to... a lot of people were trying to contact them last night and this morning but couldn't.

"We've been making an effort to find a way forward on this, and talking to Wingnut about it."

However, she said a collective agreement was illegal in New Zealand.

"We're very willing to enter into open discussions but we cannot - as you've seen from the legal opinon - agree to enter into negotiations for a collective agreement."

The Commerce Act prevents independent contractors from collective bargaining, which would be considered price-fixing.

However, she had offered to meet on a "non-agenda" basis.

She said the most recent advice from Wingnut Film's lawyer Stephens Law disputed the union's claims that there were legal ways of representing actors collectively, saying its suggestions were "artificial" and "unworkable".

Ms Walsh said she was "disappointed" by Sir Peter's response, after he warned the film may move offshore.

"This talk of 'oh my God, these outrageous demands', they don't know any of our demands, because we haven't got in the room with them."

Many of the issues the union were seeking to negotiate related to basic conditions such as accommodation, smoking, nudity, credits and not just pay

"We can only say, hey, what we'd like on this production is a fair suck of the sav. We would like to negotiate with you fair terms and conditions for the engagement of New Zealand performers on the Hobbit."

Brownlee tells union to sort it out

Meanwhile, Economic Development Minister Gerry Brownlee has told the actors union to get the dispute with the Hobbit producers sorted, and quickly.

Mr Brownlee spoke to the union and reminded them the importance of the film industry to our economy. He said he didn't understand why the union wants the rules changed when actors receive significant tax breaks by working as contractors rather than employees.

"I can't work out why an organisation that's meant to promote work for their members is involved in an activity that could see a lot of that work dry up," he told Newstalk ZB.

He wants the dispute sorted quickly and understands the union are prepared to talk, although he admits he feels powerless to do anything about the situation.

"The production money comes from offshore and those who put the money up will make their own choices about where they work," he said.

Mr Brownlee is also furious an Australian union appears to be taking the lead in the dispute - he wants it dealt with by Kiwis.

- NZPA, Newstalk ZB