The new Lord of the Rings television series will be made in New Zealand after the South Pacific nation saw off competition from Scotland to win a lucrative deal from Amazon Studios.

New Zealand has already built a multibillion-dollar movie and tourism industry on the adventures featuring hobbits, wizards and orcs after local director Peter Jackson made six films based on the JRR Tolkien novels in the country.

The television series by Amazon, which will explore storylines preceding The Fellowship of the Ring — the first of the three epic novels on which the Lord of the Rings films were based — is predicted to be among the most expensive ever produced and support thousands of jobs in New Zealand.

“We knew we needed to find somewhere majestic, with pristine coasts, forests, and mountains, that is also home to world-class sets, studios, and highly skilled and experienced craftspeople and other staff,” said JD Payne and Patrick McKay, executive producers of the Amazon production.

Pre-production has already started on the series, which will stream on the Amazon Prime video service. Filming is due to begin in Auckland in the coming months, said Amazon.

New Zealand's spectacular scenery impressed the series' executive producers

The deal with Amazon is a significant win for New Zealand’s screen industry, whose revenues fell 8 per cent to NZ$3.3bn ($2.1bn) in 2018 compared with a year earlier.

Overseas film and TV productions benefit from a 20 per cent cash rebate from the New Zealand government on qualifying spending. A further 5 per cent uplift is available for projects that offer significant economic benefits.

Online entertainment news site Deadline reported Amazon paid up to $250m to acquire rights to the Lord of the Rings prequel series while Hollywood Reporter has speculated the series would cost $1bn to produce.

Australian actress Markella Kavenagh and Will Poulter, who starred in The Maze Runner, are in talks for roles in the fantasy series, according to the publications.

Annabelle Sheehan, chief executive of the New Zealand Film Commission, said Amazon’s decision was testament to the skills, capability and reputation of the nation’s screen industry.

“It will capture the hearts and imaginations of fans worldwide and expand connections to New Zealand via Amazon Studios’ significant global audience,” said Ms Sheehan.

Scottish media had reported this year that a deal to bring the Amazon series to the country was close, with production to be based at a studio in Edinburgh. Undercover Amazon scouts had been spotted scoping out scenic locations such as the ruined Dunskey Castle in south-west Scotland.

However, a report in the New Zealand Herald in July said Brexit uncertainty had hampered Scotland’s bid. The suggestion was seized on by some supporters of Scottish independence as an example of the economic damage that would be caused by leaving the EU. Scotland voted in 2016 by 62-38 per cent to remain in the bloc.

“If this report is accurate, Scotland is set to lose out on a $1.5bn production because of a Brexit shambles we voted overwhelmingly against,” Ross Greer, a member of the Scottish parliament for the pro-independence Green party, said at the time.

The six Lord of the Rings and Hobbit films were among the most successful franchises in history, netting billions of dollars in revenue for Warner Brothers, the studio that made them.

They have also transformed New Zealand, a country that depends on dairy exports, into a world leader in “film tourism”, despite its remoteness from European and US markets.

A 2016 survey found almost one in five international tourists claimed The Hobbit was one of the reasons they chose to travel to New Zealand.

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