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[elmono311]

From IMDb:

Shocking fans who had assumed that director Peter Jackson, who was responsible for the Lord of the Rings trilogy, would direct The Hobbit -- a kind of prequel to those films -- and another Lord of the Rings epic, Jackson said on theonering.net website Sunday that he had been advised by New Line that the studio "would no longer be requiring our services on The Hobbit ...[and] was now actively looking to hire another filmmaker." Jackson said that the studio cited the ongoing lawsuit that Jackson filed against New Line in June of 2005, charging that the studio had committed fraud in reporting the revenue for 2001's The Lord of the Rings: The Fellowship of the Ring, which allegedly resulted in Jackson being underpaid millions of dollars. If the notice from New Line was a ploy to induce Jackson to drop or settle the lawsuit -- as Jackson seems to suggest in his message to "Ringers" -- it apparently failed to achieve its objective. In the message, Jackson said that he was "very sorry our involvement with The Hobbit has been ended in this way. ... This outcome is not what we anticipated or wanted, but neither do we see any positive value in bitterness and rancor. We now have no choice but to let the idea of a film of The Hobbit go and move forward with other projects."

[Supermercado]

That's a shame.

[elmono311]

I wonder how many fans will not see it now in protest

[jitspoe]

So who is going to direct it now, George Lucas?

[elmono311]

I'll direct it

[elmono311]

Looks like the fans continue to have a say. Obviously fans sent numerous letters and e-mail to New Line Cinema and the word is Jackson is going to direct it or else New Line will face a massive riot outside their studio (I made the last part up)