Lord of the Rings film director Peter Jackson has won a $US20-million ($30 million) deal to remake 'King Kong' and wants Australian actor Naomi Watts as his star, the industry press said.

Daily Variety said Universal Studios will pay Jackson, acclaimed for the Rings trilogy, the last instalment of which is due out in December, $US20 million against 20 per cent of the movie's gross ticket receipts.

The daily said that news of the almost unprecedented pay-cheque deal has stunned Hollywood studio chiefs, who are reportedly fuming about the deal which they fear could set a precedent for other top directors.

Most top Tinseltown film-makers get paid between $US10 million and $US12 million ($14.8 million and $17.8 million) for a major picture, Variety said.

The industry press also said New Zealander Jackson was eyeing fellow antipodean Naomi Watts for the lead role as the object of the giant ape's desire in the movie scheduled to hit the big screen in 2005.

Variety and Hollywood Reporters said that while no deal had yet been signed for the Mulholland Drive and The Ring star to take on the role of actor Ann Darrow in the movie, Jackson had made her an offer.

If British-born Watts, 34, is signed for the picture, she would follow in the footsteps of Fay Wray, who starred in the original 1933 classic, and Jessica Lange, who recreated the role in 1976.

Jackson, 42, who is still completing post production on The Lord of the Rings: The Return of the King, is expected to start writing the King Kong script in November and plans to shoot next summer.

He will be re-teaming up with his Rings writers Fran Walsh and Philippa Boyens and the movie will be shot in New Zealand, Variety said.

Jackson has wanted to re-make the classic ape epic for years, but only won the go ahead from Universal earlier this year following his global success with the risky $US270-million ($400 million) Rings project.

Source: Press Release