Director Guillermo del Toro tells Total Film that after nearly a year, much of the design stage for "The Hobbit" is now done as the project gears up for production next year.

Most notably Smaug the dragon which will be unique - "we’re finishing his colour palette and a little bit of the texture. But the bulk of the design took about a year, solid. It’s because of the unique features of the dragon. Early in production I came up with a very strong idea that would separate Smaug from every other dragon ever made. The problem was implementing that idea. But I think we’ve nailed it" says Del Toro.

Asked about the story structure, the plan is to adhere to Tolkien's order of adventures in "The Hobbit", but they "will be integrating Gandalf’s comings and goings" and so unlike the book we will "see where he goes and what happens to him".