According to various sources, Guillermo del Toro is currently in talks to direct back-to-back installments of J.R.R. Tolkein’s “The Hobbit”, which is being co-financed by New Line and MGM.  Del Toro is well known for his high-quality work on such films as “Pan’s Labyrinth”, “Hellboy”, “Blade 2″, and “The Devil’s Backbone.”

Peter Jackson, who directed “The Lord of the Rings” trilogy, was not able to take on writing and directing roles on “The Hobbit” due to other commitments, including “The Lovely Bones” and “Tintin.”  Instead, Jackson is opting to become an executive producer with approval over creative elements of both films.

The first “Hobbit” film is slated for a 2010 release, with the second film scheduled for a 2011 release.  Principal photography for the films, which will be shot simultaneously, is tentatively set for 2009.  Production budget is set at about $150 million for each film.

“The Hobbit” centers on Biblo Baggins and Gandalf, who go on a quest to find the treasure of a dragon named Smaug.  “The Lord of the Rings” wasn’t written by Tolkein until 17 years after “The Hobbit.”