Peter Jackson is the one they want

Award-winning writer and director Peter Jackson is in talks to work his magic on The Hobbit films.

Things have been a little up in the air since Guillermo del Toro made a surprise announcement on May 30 that he was bowing out.

At the time, Jackson commented: "New Line and Warner Bros will sit down with us this week, to ensure a smooth and uneventful transition, as we secure a new director for the Hobbit. We do not anticipate any delay or disruption to ongoing pre-production work."

Several directors were mentioned as possible replacements but no firm offer was ever made. Sources say this is because Jackson was working to get out of a few project obligations.

Guillermo del Toro is staying involved in the two films. He will continue to co-write the script with Jackson, Philippa Boyens and Fran Walsh. Peter Jackson will also wear an executive producer hat.

Fans are eagerly awaiting the release of The Hobbit films, a prequel to The Lord of the Rings. The first film is now scheduled for release in December, 2012 with the second instalment coming out a year later.