LATEST: Southampton's Hobbit Pub Battle

It looks like Sir Ian McKellan and Stephen Fry are going to pay for the Southampton pub's new licence fee.

The Hobbit pub in Southampton was first threatened with legal action from lawyers of the company which owns the rights to the Lord of the Rings. Then the firm says it may charge a licence fee of around 60 pounds ($100) a year instead.

But now it's emerged both Stephen Fry and Sir Ian McKellen - who played Gandalf in the films - are going to pay for the licence fee.

The Hobbit's tweeted about the news and says 'they're a very happy pub'.

Sir Ian said the move by California-based movie producer the Saul Zaentz Company (SZC) to force the pub in Southampton to change its name and decor as ''unnecessary pettiness''.

He was joined by fellow British actor Stephen Fry who has also thrown his support behind a 50,000-strong internet campaign to save the pub's name.

Writing on his website, Sir Ian said:

''Gandalf's portrait hangs outside The Hobbit pub in Portswood, Southampton UK and has done for the last 20 years and more.

''I haven't been there but it's clearly not a place to ill-treat hobbits, elves, dwarves and wizards, in any way. So what's the problem?

''I am a part-landlord of a pub called The Grapes. So far no vintners' group has objected. That would be silly of course. As is this unnecessary pettiness. More Alice's Wonderland than Tolkien's Middle-earth. Harrumph.

''I haven't yet talked to Stephen Fry about his disapproval of this Hollywood bullying but I'm with him all the way. All the way to The Hobbit pub once filming is over in July.''

The pub has Lord Of The Rings-themed cocktails, interior artwork and even the pub sign.

The movies, starring Elijah Wood as the hobbit Frodo and directed by Peter Jackson, are among the most successful in recent years.

The latest instalment, The Hobbit, is due out in December this year.