But what about the much discussed second film, which would likely deal with the Council of Wizards? That's a location problem. Lee isn't interested in filming in New Zealand again because it is simply too far away, for too long of a time. You can hear the tiredness in his voice -- and perhaps a bit of regret too.
That doesn't mean Lee isn't interested in being in The Hobbit at all, however! He'll appear in the film as long as he can stay in London, and there's a character he's quite keen to play. Or rather, voice. Someone very large, with a penchant for gold...
Head on over to RushBlogg and watch their video of Lee. It's a fantastic clip, and listening to him talk about Saruman, Return of the King, the Council of Wizards, and much more. It's like story-time. I could listen to him talk about Middle Earth for hours.