Has the red tape come unstuck long enough for Peter Jackson and New Line to make the much-hankered-for “Lord of the Rings” prequel, “The Hobbit”? Quite possibly.

A spy for TheOneRing.net was recently in the New York offices of New Line Cinema and clearly saw 'The Hobbit' on the film schedule for 2007.

"Please leave my email anonymous as I have some very exciting news to report. I was in New Line's NY offices to discuss upcoming projects when I clearly saw something very intriguing on a year planner. 'The Hobbit' was clearly marked on what looked like July 2007. I couldn't exactly take a moment to investigate the calendar with my audience in the room, but it definitely said 'The Hobbit'. Lets hope this is a PJ project!"

This does fit in with recent rumours suggesting that the WETA workship has indeed begun work on “The Hobbit”.

Peter Jackson has always been keen to make the LOTR prequel, but has stressed time and time again that they are complex legal issues that have to be handled before any such film can happen. In short - though New Line has the rights to make the film, MGM have the power to distribute it.

"I think there is probably a will and a desire to try and get it made. But I think it's gonna be a lot of lawyers sitting in a room trying to thrash out a deal before it will ever happen”, Jackson said last year.

If the rumour is to believed, it would seem such a partnership may have been agreed on.

"I'd be interested in doing it because I think it would give continuity to the overall chapter", the ever-thinning director said.

Last year, Jackson mentioned a possible 2008 or 2009 release date for such a film, if they could work it out. "Three or four years would be accurate, I would say”.

If “The Hobbit” happens – and again, Jackson said it will feature most of the same cast from the previous movies, including Liv Tyler – it’ll fix on the hobbit Bilbo Baggins (played by Ian Holm in the previous films) as he travels across the lands of Middle-earth with a band of Dwarves and a wizard named Gandalf on a quest to restore a dwarven kingdom and a great treasure stolen by the dragon, Smaug.

Thanks to ‘Michael