'Hellboy' director, Guillermo del Toro, announced yesterday that due to unforeseen production delays, he is forced to back out from the planned film version of J.R.R. Tolkien's 'The Hobbit', which was supposed to be a two-part prequel to Peter Jackson's 'Lord of the Rings' (LOTR) trilogy.

The Mexican director told an LOTR fansite, "In light of ongoing delays in the setting of a start date for filming The Hobbit, I am faced with the hardest decision of my life."

"After nearly two years of living, breathing and designing a world as rich as Tolkien's Middle Earth, I must, with great regret, take leave from helming these wonderful pictures," he continued.

Last week, he revealed that technically, the project was never given the green light by financially-struggling production house MGM.

Despite leaving his directorial duties, del Toro will continue working on the movie's screenplay with Jackson and writing partners, his wife, Fran Walsh, and Philippa Boyens.

Jackson said the delays pushed everything back and would have required del Toro to stay on for six years in New Zealand instead of the planned three.

Kiwi-born Jackson said, "We feel very sad to see Guillermo leave 'The Hobbit' ... , but he has kept us fully in the loop and we understand how the protracted development time on these two films, due to reasons beyond anyone's control, has compromised his commitment to other long term projects."

He would discuss options for a new director with MGM this week, Jackson told The One Ring.