Warner Bros and actors' unions were ready to bury the hatchet at the beginning of this week but the studio was today still talking about its fear of industrial action derailing The Hobbit movies, a series of emails shows.

The films' backers are Warner Bros, MGM and New Line Cinema, which have been at odds with the unions NZ Actors' Equity, Media, Entertainment & Arts Alliance (MEAA) and the Council of Trade Unions (CTU) over actors' contracts for the US$500 million ($669m) production.

Warner Bros representatives will be in New Zealand next week "to make arrangements to move the production offshore", the movies' director Sir Peter Jackson said today.

The backers were "now, quite rightly, very concerned about the security of their investment", as the dispute between the actors and the studio dragged out.

However, a series of emails between Warner Bros and the Screen Actors' Guild (SAG), sighted by NZPA, showed the two parties were discussing the wording of a press release announcing the settlement of the dispute from as early as Monday, US time.

Yet this morning, New Line Cinema said in a statement that reports the boycott of The Hobbit was lifted by unions a number of days ago and that Warner Bros asked to delay this announcement were false.

"The actions of these unions have caused us substantial damage and disruption and forced us to consider other filming locations for the first time. Alternative locations are still being considered," New Line said.

"It was not until last night that we received confirmation of the retractions from SAG (Screen Actors' Guild), NZ Equity and AFTRA (American Federation of Television and Radio Artists) through press reports. We are still awaiting retractions from the other guilds."

New Line said NZ Actors' Equity/MEAA continued to demand, as a condition of the retractions, that "we participate in union negotiations with the independent contractor performers, which negotiations are illegal in the opinion of the New Zealand Attorney General".

Last month, Actors Equity arranged an international boycott of the movies when Sir Peter refused to hold talks on a union-negotiated collective agreement on wages and conditions for local actors.

Sir Peter said a collective agreement would expose his company Wingnut to unfair liabilities and sanctions under New Zealand law.

The studios backing the film said the actors would be employed as independent contractors, with pay and conditions based on the local industry's standard working conditions.

The Screen Actors Guild and British actors joined the work blacklist of The Hobbit, which is expected to include Sir Ian McKellen reprising the role of the wizard Gandalf from the Lord of the Rings movies.

In a statement posted on Wednesday on its website, the Screen Actors Guild advised members it had lifted its blacklist on The Hobbit after advice from the New Zealand union and that members were free to work on the film.

But Sir Peter said the dispute had already done serious damage by undermining Warner Bros confidence in the New Zealand industry.

"Unfortunately lifting the blacklist does nothing to help the situation," his statement said.

CTU president Helen Kelly said today that the industrial issues concerning the film industry were resolved at a meeting with the Screen Production and Development Association of New Zealand last week.

"This established a path that guaranteed films commencing before 31st March next year would use the existing Pink Book and in that period a revised Pink Book would be agreed for subsequent films."

Some of the cast of The Hobbit was announced this afternoon.