Actors James Loye as Frodo (R) and Peter Howe as Sam (rear) are shown in this undated publicity photo released March 24, 2006 from "The Lord of the Rings" musical, which opened to mixed reviews March 23, 2006 after its debut at the Princess of Wales Theatre in Toronto, Canada.-Xinhua/Reuters file photo

World famous director Peter Jackson and Mexican filmmaker Guillermo del Toro said they will rely on New Zealand scenery for the setting of two movies based on the JRR Tolkien book "The Hobbit".

In a hour-long live internet chat with fans this morning, Jackson, the films' executive producer, and director del Toro, answered questions about the latest Tolkien book to be adapted for the big screen, the New Zealand Press Association reported.

Jackson said they hoped to rebuild Hobbiton "bigger and even better than it was for Lord of the Rings" and with the Matamata landowners permission, use the same location.

"It is unlikely we will need any locations outside of New Zealand which has always been the perfect Middle Earth," Jackson said.

"There is nothing yet that Tolkien has described that we haven't managed to find in this amazing little country and I expect the Hobbit to be no different."

Del Toro confirmed no locations outside New Zealand were being considered.

Pre-production work on the films will begin in 2009 and the films will be shot back-to-back, beginning in 2010.

The Hobbit is set to be released in December 2011 and the second as yet untitled film in December 2012.

Jackson said del Toro was chosen as director because of his "respect for fantasy", his understanding of characters and confidence with design and visual effects.

Del Toro, who will arrive in New Zealand after the release of his latest film Hellboy 2, said he wanted to utilize as many of the crew of the Lords of The Rings trilogy possible.

He said Ian McKellen (Gandalf) and Andy Serkis (Gollum) would return for the Hobbit films but actors for new characters were not yet decided and casting was some time off.