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New Zealand has been insulted in a hit animated kids' movie produced by the Hollywood studio given a $67 million tax break to film The Hobbit trilogy here.

The Lego Movie, which opened in Kiwi cinemas 11 days ago, has wowed critics with its slick production, in jokes and star-studded voiceover cast, which includes Will Ferrell, Liam Neeson, Channing Tatum and Morgan Freeman. It has grossed $514m at the worldwide box office.

But some of its humour has fallen flat with Kiwis - though The Lego Movie writers and directors Phil Lord and Chris Miller say they were satirising Middle Earth and the Middle Ages, not New Zealand.

Dunedin man Stu Fleming, his partner and their 7-year-old son saw the film on Thursday, and were surprised when Vitruvius, voiced by Freeman, described one of the places in Legoland as "Middle Zealand", a "wondrous land full of knights, castles, mutton, torture weapons, poverty, leeches, illiteracy, and, um ... dragons."


The reference to poverty and illiteracy had Fleming and his partner perplexed. "We thought it might not be appropriate. We were not quite sure why it was in there."

Some of the audience had laughed, but others seemed as confused as he was, Fleming said. "It was like when someone's made a bit of an odd joke and you are not sure how to react, which was how we felt."

Lord and Miller told the Herald on Sunday they were not making fun of New Zealand.

"We called it Middle Zealand because that is where Lord of the Rings was shot, and Peter Jackson hangs out there.

"We are, incidentally, huge fans of New Zealand, LOTR, Weta, island nations, and the film Eagle vs. Shark."

The Lego Movie producers, Warner Bros, are well known to Kiwis after being granted $67m tax breaks in 2010 to keep filming of the The Hobbit trilogy in New Zealand.

Prime Minister John Key was involved in talks with studio bosses at the time.

Key said yesterday most people would take The Lego Movie line "for what it is - a light-hearted line in a children's fantasy film".

But Opposition tourism spokeswoman Darien Fenton said Key should use his contacts to tell Warner Bros the "Middle Zealand" references were not on.

New Zealand First leader Winston Peters, who has asked Warner Bros to give back the $67m subsidy after The Hobbit topped $1billion in sales, said he assumed The Lego Movie makers were referring to New Zealand's "financial illiteracy". "It's a Freudian joke on the New Zealand Government."