Raimi and Jackson on 'The Hobbit' movie

I came across this story at IESB this morning:

All indications from our inside sources are saying that while Raimi was seriously considering the Titans offer, he has a much bigger fish to fry and has possibly chosen to go in the direction of Middle Earth instead.

While we are being told that negotiations are still underway for the prequel and final deals won’t be reached immediately, Raimi is leaning towards directing The Hobbit as his next big project.

Where does this leave the legendary Peter Jackson?

Although New Line’s Bob Shaye and Jackson had a much publicized dispute over “the green,” the LA Times recently spoke with Shaye and he had this to say,

"Eager to move ahead with "The Hobbit," New Line has quietly been trying to mend fences with "Rings" filmmaker Peter Jackson, who has sued the company over his share of profits from the first "Rings" films. When asked if it was true that company insiders had been in talks with Jackson's reps, Shaye replied, "Yes, that's a fair statement. Notwithstanding our personal quarrels, I really respect and admire Peter and would love for him to be creatively involved in some way in 'The Hobbit.'"

All sources indicate that although Jackson won’t be back to direct, our source is telling us that Raimi is looking to helm The Hobbit with Peter Jackson attached to produce. Raimi has said in the past that he would not take on the project without Jackson’s blessing. Well, looks like he may have it!