Oscar-winning director Peter Jackson claimed that Media, Entertainment, Arts Alliance (MEAA), an Australian trade union, admitted their proposal is illegal. Jackson said MEAA's decison to black list The Hobbit has no legal foundation.

In a stament issued by WingNut Films, Peter Jackson said: "The Hobbit is being punished with a boycott which is endangering thousands of New Zealand jobs and hundreds of millions of dollars in foreign income, for no good reason."

"The MEAA's campaign against The Hobbit has nothing to do with the way WingNut Films has treated actors and everything to do with using The Hobbit to bring publicity to the MEAA's cause."

"While the MEAA has admitted their blacklisting of The Hobbit has no legal foundation, they have done nothing to remove the ban on the film."

Jackson's statement further details the amount that WingNut Films paid actors in the past and compares them with the rates required by the Screen Actor's Guild in the US.

Peter Jackson also denied rumors that The Hobbit's production will be moved to Eastern Europe to cut cost. Jackson said Eastern Europe is only considered mainly because the film had been blacklisted which makes it impossible to shoot in New Zealand.

Jackson said "Eastern Europe is only being considered because a minority group of the NZ acting community has invoked union action that has blacklisted our film, making it impossible to shoot in New Zealand."

"It's very naïve to think we have much of a say in what happens from this point on. Warners gave us an opportunity to set the film up in New Zealand and we have been unable to do that successfully."

Jackson said it will be Warners who will decide how and where their financing for the film production will be spent.