The Lord of the Rings director fears the project could be moved from New Zealand to Eastern Europe if producers feel filming there could be an issue with union officials, who are urging workers not to work on the prequel over employment issues - and he has released a statement urging members to rethink what they're doing.
The stand-off revolves around the producers' refusal to sign a deal with local New Zealand performers for their work on the stalled film.
Jackson's statement reads, "There is a twisted logic to seeing NZ humiliated on the world stage, by losing the Hobbit to Eastern Europe. Warners (film studio) would take a financial hit that would cause other studios to steer clear of New Zealand. Seriously, if the Hobbit goes east (Eastern Europe in fact) - look forward to a long dry big budget movie drought in this country."
The boycott has become an international issue with Canadian Actors Equity, U.S. Actors Equity, the Screen Actors Guild and the U.K. Actors Equity supporting the New Zealanders.
Jackson has explained that Disney bosses no longer shoot in Australia because of frustration with the same union he's currently battling with.
The Hobbit has been mired with problems for months - the film is still not fully financed and producer Jackson's original director, Guillermo del Toro, quit the project in May (10), citing scheduling difficulties.
Jackson is now expected to take over as director.