As one half of the very popular Flight of the Conchords duo, Bret McKenzie has certainly made a name for himself in the comedy world. While he has recently started to branch out acting-wise with more prominent roles in the upcoming Austenland and The Hobbit trilogy, McKenzie also drew notice for penning some excellent original songs in 2011’s The Muppets. The multi-talented New Zealand native ended up winning an Academy Award for Best Original Song for “Man or Muppet,” and he’s returning to pen even more songs for the sequel Muppets Most Wanted.

Steve recently sat down with McKenzie to discuss his work in Austenland, but during the course of the interview McKenzie revealed that he’s currently writing a film of his own that he describes as “a fairy tale comedy musical.” The Muppets co-writer and director James Bobin is helping McKenzie develop the property, which will involve singing dragons and monsters and draws on elements from both The Muppets and The Princess Bride. Hit the jump for more on this rather promising project.

While speaking with Steve, McKenzie said that he’s currently in the process of developing a screenplay of his own with the help of Bobin:

“I’m in the middle of a script for a kind of—it hasn’t got a name yet but it’s a fairy tale comedy musical, sort of akin to Labyrinth or something like that. I’m developing and that script’s halfway through. James Bobin’s helping me. I’m the official writer but we’re developing it. I want to make a comedy musical with singing dragons and monsters and stuff. [It’s] live-action, so it would be a mixture of The Muppets and The Princess Bride.”

McKenzie went on to caution that it’s still very early days on the project so there’s no telling how much it will change when/if it comes to fruition, but he seems highly enthused by the idea:

“No title yet but it’s definitely my favorite thing I’m working on at the moment. It’s early, though, it’s early. It’s still developing.”

Watch this portion of the video interview below, and look for Steve’s full interview with McKenzie on Collider soon.