There's no question about the big Hollywood story this week: Guillermo del Toro has quit The Hobbit.

One always sensed that del Toro, among the most respected of contemporary directors, was uneasy about the notion of devoting five years to a two-part treatment of JRR Tolkien's first Middle Earth novel. In 2008, shortly after the news was announced, del Toro told Reel News: "I thought the idea of a second Hobbitfilm was so compelling that I said okay, half a decade of my life, let's go. But it is a chunk of life, all right."

Since then MGM, which holds the rights, has lurched towards bankruptcy, and the project has searched increasingly desperately for its green light. Last week del Toro finally acknowledged the inevitable.

"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," he said in a statement. "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."

Del Toro most recently co-produced and co-scripted Don't Be Afraid of the Dark, to be released later this year.

Hobbitproducer Peter Jackson, director of the hit Lord of the Ringstrilogy, said that del Toro would remain as a co-writer on the project. Surely funds can be found to finance such a bankable hit?