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Sir Peter Jackson is recovering in Wellington Hospital's intensive care unit after undergoing surgery for a stomach ulcer.
The filmmaker, who will direct The Hobbit, was admitted to hospital on Wednesday with acute stomach pains and had surgery that night for a perforated ulcer.
Sir Peter was today in a stable condition in intensive care, a Wellington Hospital spokeswoman told NZPA this afternoon.
He would be spending several more days in hospital but doctors were pleased with his progress, The Hobbit publicist Melissa Booth said today.
His doctors expected him to make a full recovery.
Filming for The Hobbit was due to start next month.
Sir Peter's surgery would delay the start of filming, but was not expected to affect his commitment to the project, Ms Booth said.
The Hobbit author JRR Tolkien also suffered a perforated ulcer, before dying in 1973.
A perforated ulcer is a when an ulcer in the stomach burns completely through the stomach lining, leaving a hole for stomach acid and foods to enter the abdominal cavity.
Production of The Hobbit has already undergone several issues with the departure of the original director Guillermo del Toro last year and financial problems.
Warner Bros last year threatened to take the production to Eastern Europe because the films were the subject of a boycott by several international actors' unions, including New Zealand's Actors' Equity.
The studio agreed to keep the movies in New Zealand after the Government changed employment laws and gave the studio millions of dollars in tax breaks.