Guillermo Del Toro has pulled out of 'The Hobbit'.

The director quit the movie following continued delays with production, but confessed he "regrets" having to make the decision to leave the two-part prequel.

Speaking to a 'Lord of the Rings' fan website, he said: "In light of ongoing delays in the setting of a start date of filming 'The Hobbit', I am faced with the hardest decision of my life.

"After nearly two years of living, breathing and designing a world as rich as Tolkien's Middle Earth, I must, with great regret, take leave from helming these wonderful pictures.

"The blessings have been plenty, but the mounting pressures of conflicting schedules have overwhelmed the time slot originally allocated."

He will continue to work on the project as the screenwriter.

Just last week, Guillermo confirmed studio MGM was experiencing financial difficulties and a start date had not been confirmed on the film.

He said: "There cannot be any start dates until the MGM situation gets resolved. They do hold a considerable portion of the rights."

The director of the previous 'Lord of the Rings' films Peter Jackson has hinted he would be willing to return to helm the project, but admitted it would put his other work at risk.

He said: "If that's what I have to do to protect Warner Bros' investment, then obviously that's one angle which I'll explore. The other studios may not let me out of the contracts."