Avatar sequels to be made in New Zealand

Avatar has made $2.8bn (£1.8bn) at the box office worldwide

Three sequels to the movie Avatar are to be made in New Zealand, director James Cameron and the New Zealand government have announced.

The move means at least NZ$500m ($413m, £254m) will be spent in New Zealand and hundreds of jobs created.

It came after the government increased film industry tax rebates up to 25% from the current 15%.

Avatar, which was also shot in New Zealand, was released in 2009 and went on to win three Oscars.

The 3D film is the highest grossing movie of all time.

In a statement, Economic Development Minister Steven Joyce described the move as "excellent news for the New Zealand screen industry".

"The Avatar sequels will provide hundreds of jobs and thousands of hours of work directly in the screen sector as well as jobs right across the economy," he said.

Under the new rebate rules, the base will be raised to 20%, with another 5% available if producers meet specific criteria in terms of benefits to New Zealand.

The changes were aimed at both encouraging domestic production and "increasing the competitiveness of our incentives for international productions in the short to medium term", a separate statement said.

New Zealand Prime Minister John Key called the Avatar announcement "a great Christmas present for those involved in making world-class movies".

James Cameron said it was "quite a thrill to be officially saying that we're bringing the Avatar films to New Zealand".

He aimed to release the three movies yearly from late 2016, he said.