Weta Workshop's boss Sir Richard Taylor last night said the New Zealand film industry was "at some level of peril".

He said a $670 million US-backed production of Tolkien classic The Hobbit could be produced elsewhere if a union boycott of the project was not lifted.

"We are deeply concerned it may [go overseas].

"Our industry is being put in a very dire place by very few people who have nothing to do with the film industry in New Zealand."

Up to 1500 workers marched from Weta's Miramar studios into central Wellington to picket an Actors' Equity meeting being held at St John's Hall.

The Equity meeting - which was to discuss unrelated matters - was cancelled after union bosses learned the march was on its way.

Equity spokeswoman Frances Walsh said the union had "no choice" but to call off the meeting "because we are not going to expose our performers to harm".

Sir Richard said the technicians had taken to the streets because they feared the project - about which they were "deeply passionate" - would be moved overseas by the foreign-owned studios bankrolling the film.

"It's not a definite that it will go offshore, but if the boycott continues it's a definite possibility ... which is why we marched tonight," he said.

"Too many people have worked for too many years to try keep this film here.

"The people who worked on the original [Lord of the Rings] films want to work on The Hobbit," he said.

Culture and Heritage Minister Chris Finlayson last night said it was important that production of The Hobbit stayed in New Zealand.

"It would fire up the industry, irrelevant of the film in question.

"But I do think it represents a part of the New Zealand identity."

Speaking after the technicians' meeting, Sir Richard told TVNZ that the New Zealand film industry was "at some level of peril".

"The mood is one of great concern ... Wellington film technicians want to be heard. They want to be represented in these very bizarre and strange events that are going on right now," he said.

"By the actions of a very limited few, a huge fraternity of film-makers, technicians, and artists will be affected."

He said producers were doing all they could to retain the films in New Zealand.

Actors' Equity is seeking a collective agreement, and has asked its members to boycott the two Hobbit films.