The producers, which include Matt Reeves, Ross Ritchie and Stephen Christy, are being allowed to shop the project to other studios, sources indicated. Several studios are already interested. The project is a ready-to-go, four quadrant franchise starter from Wes Ball, the filmmaker behind the Maze Runner series, which grossed almost a billion dollars. One possible home could be Netflix, where Reeves, the filmmaker behind the acclaimed Planet of the Apes movies, has a production deal. Paramount, whose current motion picture head Wyck Godfrey was a producer on Maze Runner, is another possible contender.

Less clear are the reasons for the sudden red light. One source indicated that the production, which was to use motion capture and heavy digital effects to bring animals to life, veered too close to Disney's homegrown CGI-made fare such as The Lion King and The Jungle Book.

Another source said Disney does not want Fox in the big-budget game, which Mouse Guard, with a budget of $170 million, found itself in. Instead, Disney wants its new studio division to focus on lower-cost family movies, as well as PG-13 and R-rated fare. One of the few exceptions to this will be Avatar, the big-budget sci-fi movies series from James Cameron.

Another insider disputed this idea, saying Fox will not have a budget cap on its projects, saying that in the end, Disney simply balked at the movie itself, believing it too similar to its other fare, and at the film’s high price point.

Based on David Petersen's two-time Eisner winning comics and a graphic novel, Mouse Guard has been described as Game of Thrones for mice. Set in a human-free, medieval world, the comic follows the so-called "Mouse Guard," a group of mice who have sworn to protect their brethren from predators and other threats. WETA was providing the digital effects.

Andy Serkis, Idris Elba, Samson Kayo and Thomas Brodie-Sangster were attached to the project, with Jack Whitehall also circling a role. Motion-capture veteran Serkis was on board to play villain Midnight, a former Guard blacksmith who betrayed the order; Elba was set to take on the role of Celanawe, a former hero who was considered dead but is found; Brodie-Sangster was tapped to play Lieam, a young newbie to the Guard and Kayo was slated for Saxson, a rogue with a difficult temper. Whitehall was in talks for the role of Kenzie, a calm staff-wielder who often partners with Saxson.

Mouse Guard was one of several projects greenlit before the acquisition. Death on the Nile and the Ryan Reynolds video game movie Free Guy were among the other handful of titles on the greenlight list. Some of those may also be getting a second look from Disney execs.

Disney has already let go several other Fox titles, notably from the venerated and recently shuttered Fox 2000 arm.