After a day of angry debate, the New Zealand parliament has bowed to the will of Hollywood studio Warner Bros, passing labour legislation designed to keep production of The Hobbit films in New Zealand.

The legislation, which impedes or prevents unionisation of film industry workers in the country, passed 66-50 on a party line vote.

The ruling centre-right National Party and its partners were in favour, while centre-left Labour and the Greens opposed the bill.

The National Party emphasised the financial benefit of retaining the $US500 million Hobbit production there and described the legislation as a clarification of existing law.

Labour, in contrast, charged angrily that the move "reduced New Zealand to a client state of a US movie studio."

Under the new legislation, workers involved with film or video game production will be independent contractors, rather than employees, unless they enter into an agreement that specifies that they are employees.

Independent contractors cannot collectively bargain under New Zealand law.

Separately, the NZ government is paying Warners up to $US25 million in subsidies and advertising spending, above some tens of millions of dollars already available under a tax incentive program.

That led one member of parliament to decry a "$NZ34 million shakedown of the New Zealand government by Warner Bros."

- Reuters