WELLINGTON - THE New Zealand government on Friday passed legislation clearing the way for two 'Hobbit'films to be made in the country despite stiff protest by opposition lawmakers, who said it was a 'day of shame.'

The government's decision to rush through amended labour laws, part of the deal made with Warner Bros. Pictures to keep director Peter Jackson's lucrative project in his native New Zealand, has split public opinion.

Some union officials reportedly received death threats in the wake of a short-lived international boycott over working conditions.

Warner Bros. executives said they would consider moving the production elsewhere, a move that could have cost the country $1.5 billion (S$1.9 million) and damaged the reputation of its fledgling film industry. They flew down to New Zealand earlier this week to negotiate with a delegation led by Prime Minister John Key.

The government said announced a deal on Wednesday to keep the films in New Zealand, although it was forced to hand over tens of millions of dollars for the privilege.

'We were not prepared to see thousands of Kiwi jobs disappear and we were not prepared to see the hard work of the many talented New Zealanders who built our film industry from scratch put at risk,' Labour Minister Kate Wilkinson told parliament during the debate.

NZ law passed to keep Hobbit