THE FILMING LOCATION of The Hobbit is hanging in the balance, as crisis talks between New Zealand’s Prime Minister and Warner Bros continue.

Prime Minister John Key said that there is a “50-50” chance that the films would be made in New Zealand.

The Hollywood studio is considering moving the shooting of the two-part the Lord of the Rings prequel out of the country, after local acting unions threatened to boycott the films in a row over wages last month.

Following the announcement that production could be moved to another country, thousands of New Zelanders  gathered to protest.

RTÉ reports that other possible locations being considered by Warner Bros include Ireland, England, Scotland, Canada, Australia and eastern Europe.

The move could cost reportedly New Zealand as much as $1.5bn (€1bn), according to economists.

New Zealand’s Prime Minister John Key met with Warner Bros executives, including New Line Cinema boss Toby Emmerich, at his official residence in Wellington to discuss the situation, the BBC reports.

Following the meeting, Key told reporters that he expects a decision in the next 24 to 36 hours.

The three Lord of the Rings movies were all filmed in New Zealand, and earned billions of dollars at the box office.

Shooting for The Hobbit is scheduled to begin in February.