"The Hobbit" still has not been given the official green light, but Sir Peter Jackson is in Los Angeles this week quietly meeting with actors.

The New Zealand-based director's casting trip, which also included stops in New York and the U.K., underscores the progress being made on a complex series of deals to bring J.R.R. Tolkien's epic fantasy novel to the big screen.

Sources say Jackson's pact with Warner Bros. to direct the two-part "Hobbit" adaptation is close to done, but the sticking point continues to be the dire financial situation at MGM, which holds half the rights to the property.

Warners, which is acting as the lead studio on the co-production, is furiously negotiating with MGM, which is being steered by a committee of creditors and financial stakeholders. Even if Warners wanted to fund the films itself, that would require a sign-off from the somewhat rudderless MGM.

Jackson, who has been in L.A. since Saturday, is working with casting director Victoria Burrows on assembling what will likely be a large, international cast for the project.

"The Hobbit" has so far taken a bumpy road to the screen. Director Guillermo del Toro abruptly left the project in May, citing scheduling delays. Jackson, who directed the megahit "Lord of the Rings" trilogy and was to serve as a producer on "Hobbit," was then recruited to direct the films. But Jackson has expressed his own concerns about timing, privately telling the studios he would not commit to the project unless the films could be fast-tracked and into theaters in 2012 and 2013.

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