Director Guillermo Del Toro has confirmed upcoming Lord of the Rings prequel The Hobbit has been put on hold indefinitely because the movie has been caught in a "tangled negotiation" over the future of the MGM movie studio.

The film, based on J.R.R. Tolkien's first book in the fantasy series, was reportedly due to begin shooting this summer, but has been mired in delays.

Lord Of The Rings director Peter Jackson, who will act as producer on the new film, recently dismissed rumours of trouble with the picture, insisting: "It's not really been delayed, because we've never announced the date".

But Del Toro has now spoken out, revealing the film is the latest victim of the ongoing problems at MGM - the famed media company was put up for sale last year after falling millions of dollars in debt, but a buyer is yet to be found.

He tells Comingsoon.net, "It's not greenlit. That's categorical. We've been caught in a very tangled negotiation. There cannot be any start dates until the MGM situation gets resolved. They do hold a considerable portion of the rights."

But Del Toro admits preparation work has already begun so the film can begin production as soon as the go-ahead is given.

He adds, "We have designed all the creatures. We've designed the sets and the wardrobe. We have done animatics and planned battle sequences. We are very, very prepared for when it is finally triggered."

The next instalment in the James Bond franchise has also been suspended indefinitely due to the uncertainty over the future of MGM. Production on the 23rd Bond movie, which was scheduled for a 2011 or 2012 release date, was suspended last month.