UPDATE 6.45pm: The first, two-hour meeting between Warner Bros executives and the government ended without any conclusion to the Hobbit stand-off. At a 6.40pm press briefing, Prime Minister John Key said there would be more talks overnight, and tomorrow, before any decision is made.
The Government has made it clear it will not enter a "bidding war" to keep the Hobbit films in New Zealand, Prime Minister John Key says.
Mr Key will this afternoon meet several high-powered executives from the film's main producer Warner Brothers and head of production company New Line, Toby Emmerich, in a bid to keep the movies here.
He indicated the Government was open to looking at changing industrial relations laws, but ruled out a substantial financial incentive.
"In the conversations I've had with Warner Brothers so far I've made it quite clear if it comes to a bidding war, then New Zealand's out, because I don't think that's the right way to run this," Mr Key told reporters this morning.
"We don't want to be renegotiating with every single production company that comes to New Zealand."
Warner Bros said it could move to another location after a dispute between producer Sir Peter Jackson and the Actors' Equity union, which issued a do-not-work order on the film over the issue of a collective agreement for actors.
Mr Key said he had been assured by the Council of Trade Unions (CTU) that no further industrial action would take place, but the issue was not resolved.
"I don't know how much store Warner Bros put in that, but I understand not a great store," he said.
"They can't un-see what they have now seen...I'm worried about the long-term implications for the industry."
He said he would consider looking at changing the definition of contractors in employment legislation.
That follows a court case in which former Weta Workshop model maker James Bryson was deemed to be an employee, not a contractor.
"There's no question that industrial relations issues around the definition of a contract vis a vis an employee run to the heart of this whole issue," he said.
Mr Key was critical of the Australian-based union Media, Entertainment and Arts Alliance (MEAA) union, which the New Zealand Actors' Equity union is part of.
"The Australian movie industry is in tatters ... So if we want the same thing to happen in New Zealand, we should go ahead and let them run our industrial relations policy in this country.
"I for one don't intend to let them do that."
Mr Key said he had not received any advice on preventing foreign-based unions like the MEAA from registering here, adding it was a "very complex issue".
The MEAA's Simon Whipp said this morning that placing blame on the MEAA was unfair.
"Performers in New Zealand have made a decision about how they wish to be represented, and they've chosen to be represented by us. They make the decisions about how their industrial interests are advanced, not me. I work to their instructions," he told Radio New Zealand.
Labour deputy leader Annette King said her party would not commit to any changes to labour laws until it had seen proposals in writing and considered the effects.
A law change would affect all New Zealanders, not just the film industry.
"Of course we'd be worried if that was an excuse (for wider changes to employment laws)."
Ms King said she thought films would stay in New Zealand.
"I cannot see why it would not be made in New Zealand, with the major issues we're told about off the table, I would hope there is now commonsense."
Labour MP Trevor Mallard this morning said he did not want to make it a political issue, but added that Economic Development Minister Gerry Brownlee could have developed a better relationship with the studio.
Mr Mallard said that when he was a minister with the previous government he built relationships with Warner Bros.
"It was a positive relationship and we felt that that worked much better than working in a crisis mode."
Mr Brownlee laughed off suggestions he did not have a good enough relationship with the studios, adding he had been in contact, but not regularly.
"The reality is it wouldn't matter have mattered how much I'd spoken to Warner Brothers, as long as you've got the Australian MEAA passing the sort of resolutions that they did and confronting the studio like that - that's a real breaker," he said.