Rumors have been circulating that The Chronicles of Narnia: Prince Caspian, the sequel to The Chronicles of Narnia: The Lion, The Witch and The Wardrobe will no longer be filmed in New Zealand (where the first movie was shot), and instead will be filmed in Britain.

On December 9, the UK based The Times reports:

Prince Caspian, the next film in the Narnia series, is set to be made at Britain's Pinewood Studios. Andy Bird, the president of Walt Disney International, told an audience of television executives on Thursday that shooting would begin in February and that post-production would also take place in Britain.

The announcement is a coup for the British film industry and confirms the belief that Hollywood is being lured back to Britain on the back of the new tax incentives introduced by Gordon Brown.

Related: The Silver Chair Will Completely Reboot Narnia Franchise

The Lion, The Witch and The Wardrobe was shot in New Zealand - which has established itself as a popular, low-cost filming location over the past few years.

Prince Caspian's backers had considered New Zealand and the Republic of Ireland as alternative locations for the film, although the story is set initially in wartime Britain, before the four Pevensie children return to Narnia a thousand years after the events in The Lion, The Witch and The Wardrobe.

Those familiar with the project said that the revised tax regime was an incentive for Disney and Philip Anschutz's Walden Media, the film's other backer, to come to Britain, helping to revive a sector that had been in crisis as a result of the uncertainty that surrounded the scrapping of the previous tax rules.

A formal announcement confirming the decision to film in the UK has yet to be made, but the studio has already formally committed to undertaking special effects in the UK, the scale of which is enough alone to ensure that the film is the first major film to qualify for the break.

New Zealand's NewsRoom.co.nz reports on December 11th that:

The producer of the new Narnia film Prince Caspian says there's been no change to New Zealand's involvement in the project.

New Zealander Tim Coddington says reports Disney has axed plans to make the sequel to The Lion, The Witch and The Wardrobe here are wrong.

He says he understands the role New Zealand will play in the film is still the same and details are expected this week.

The chief executive of Film New Zealand, Judith McCann, says the industry always knew the film's entire production would not be based in New Zealand.

The Chronicles of Narnia: Prince Caspian will be released on May 16, 2008.