New Zealanders have taken to the streets in the thousands to try and keep the production of The Hobbit film from moving out of the country.

Many protestors dressed as characters from JRR Tolkien’s books and movies. The protesters opposed the idea of relocating Peter Jacksons two-part Lord of the Rings prequel. A dispute over pay and conditions led producers to hint that they might move filming to another country.

Carrying banners proclaiming “New Zealand is Middle Earth” and “We Love Hobbits,” a reported 2-3,000 people gathered in New Zealand’s capital, Wellington, and other cities such as Auckland, Hamilton, Matamata and Christchurch in advance of a visit by executives from the studio Warner Bros.

Jackson is due to start shooting early next year, but the row with a local union – now resolved – has damaged New Zealand’s chances of retaining the films. The Lord of the Rings trilogy helped to establish the country as an up and coming location for big budget film-making. But in recent weeks producers have hinted at a move to the UK, Canada, Australia or eastern Europe for the new films.

The Warner executives will make the final decision later this week, reports say, after meeting New Zealand’s prime minister, John Key, who has stepped in personally to try and resolve the crisis. He told reporters yesterday that there was probably a 50-50 chance of the movies being filmed in New Zealand.