Having resolved their epic royalties dispute, Lord of the Rings director Peter Jackson and New Line Cinema have sealed a deal for the production not one but two Hobbit films, according to SF CrowsNest.

"I'm very pleased that we've been able to put our differences behind us, so that we may begin a new chapter with our old friends at New Line," Peter Jackson told SF CrowsNest. "We are delighted to continue our journey through Middle Earth."

The two films are slated to begin preproduction immediately, with projected release dates penciled in for 2010 and 2011. Jackson and Fran Walsh will executive produce. No director has been announced, though Variety speculates that Spider-Man director Sam Raimi might be in the running.

Although it is not clear at this point what the content of the two films will be, previous speculation has had Jackson interested in spreading the story of J.R.R. Tolkien's The Hobbit, or There and Back Again (1937) over two films, filling in other events that happen simultaneously with the story of Bilbo Baggins's quest to the Lonely Mountain but only fully described in later works, such as The Lord of the Rings. For example, Unfinished Tales (1980), a posthumous compilation of some of the author's unpublished work, contains a narrative of the events leading up to the opening chapter of The Hobbit from Gandalf's perspective, and the details of Gandalf's encounter with the Necromancer, barely mentioned in The Hobbit, are described in the text and appendices of The Lord of the Rings.

MGM and New Line will co-finance the films, with New Line running production and distributing in domestic territories. MGM will distribute internationally.

"We are very pleased we have been able to resolve our differences, and that Peter and Fran will be actively and creatively involved with The Hobbit movies," New Line co-chair Bob Shaye said. "We know they will bring the same passion, care and talent to these films that they so ably accomplished with the trilogy."