Multi-million pound 'Lord of the Rings film studio' in Leith Docks set to open this year

The site in Leith where the Lord of the Rings TV show could be filmed

The Scottish Government's screen agency revealed it was in "advanced negotiations" with a preferred bidder for the waterfront site which would allow it to become operational "by the end of the year."

However, the operator of the studio facility is being kept under wraps while legal negotiations are ongoing. The deal will also have to have a final sign-off from the Scottish Government, which had committed to provide financial support for the studio to allow it to get off the ground.

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However, Screen Scotland said there had been a significant increase in international enquiries since the preferred site for a new studio was announced late last year which supported its own analysis "that market conditions will support a studio in Scotland."

The complex, which is expected to have five sound staged up to 100 ft tall, alongside workshops and offices, is expected to transform Scotland's ability to attract major film and TV productions.

It was reported last month that a new Lord of the Rings TV series being developed by Amazon had been lined up for the studio if it is ready by the autumn.

A worldwide hunt for an operator was launched in December after the Scottish Government agreed to back the transformation of the former Pelamis plant.

At the time Screen Scotland said it expected to make a final announcement on a successful bidder "in the spring" of 2019.

At the time the tender was issued, the new Screen Scotland agency hailed the 8.6 acre site as having "enormous potential."

It said the building could be rapidly adapted so that it could "swiftly provide a home in Scotland for large-scale productions."

A spokeswoman for Screen Scotland said today: "Following the published tender process, we are currently in advanced negotiations with a preferred bidder for the Studio in Bath Road, Leith.

"Subject to finalising the necessary legal detail and Scottish Government approval, the operator will be announced as soon as possible, with the intention still to have the studio operational by the end of the year."

The 160,000 sq ft site on Bath Road had played host the previous year to the Avengers: Infinity War blockbuster. It was the biggest film production ever to shoot in Scotland, with the six week shoot, including the filming of dramatic scenes at Waverley Station and on the Royal Mile, was said to be worth £10 million to the city's economy.

The tender for the Leith Docks site was issued emerged two months after a farmer won a long-running legal battle to remain on land earmarked for a £250 million studio development in Midlothian.

However in January it emerged that the consortium behind the troubled Pentland Studios development had joined forces with one of Scotland's biggest landowners to pursue an alternative site.

Nine sound stages would be created at a 48-acre site at Salter's Gate in Midlothian on land currently owned by the Duke of Buccleuch’s property empire.