MGM’s money woes (the studio is up for sale) continues to delay production on Peter Jackson’s The Hobbit. As a result, director/writer Guillermo del Toro (Pan’s Labyrinth, Hellboy) has now officially departed from the project.

del Toro tells theonering.net:

In light of ongoing delays in the setting of a start date for 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.

I remain grateful to Peter, Fran and Philippa Boyens, New Line and Warner Brothers and to all my crew in New Zealand. I’ve been privileged to work in one of the greatest countries on earth with some of the best people ever in our craft and my life will be forever changed.

The blessings have been plenty, but the mounting pressures of conflicting schedules have overwhelmed the time slot originally allocated for the project. Both as a co-writer and as a director, I wish the production nothing but the very best of luck and I will be first in line to see the finished product. I remain an ally to it and its makers, present and future, and fully support a smooth transition to a new director.

The Hobbit, which will be released as two separate films, was scheduled to begin production in the summer with part one tentatively slated for a December 2012 release.