THE heirs of JRR Tolkien have settled a multi-million-pound lawsuit with the studio behind the Lord Of The Rings trilogy over the blockbuster’s profits.

Tolkien’s heirs sued New Line Cinema in February last year for a reported $220m (£133m) in a move which threatened to block the release of two up-coming prequels based on Tolkien’s novel, The Hobbit.

The Tolkien Trust, a British charity which supports causes across the world, will be one of the main beneficiaries of the settlement between the late Oxford don’s heirs and New Line Cinema, which became a unit of Warner Bros in March.

Tolkien’s heirs claimed the studio owed it millions of pounds in undistributed profits from the three films, which made £1.8bn ($2.9bn) worldwide, and won 11 Oscars after their release between 2001 and 2003.

Christopher Tolkien said: “The trustees regret that legal action was necessary, but are glad that this dispute has been settled on satisfactory terms that will allow the Tolkien Trust properly to pursue its charitable objectives.

“The trustees acknowledge that New Line may now proceed with its proposed films of The Hobbit.”

In a joint statement, both sides' parties said the precise terms of the settlement were confidential.