New Line is so confident that filmgoers will want to see its live-action ‘Lord of the Rings’ that it’s made the sequels already. Now, the hype’s begun.

“Yes, these are the real sets,” says Sir Ian McKellen, the great English actor, as he squeezes his bottom into a mini-sized chair in a mini-sized Hobbit house, specially flown from New Zealand and reassembled on the grounds of a French castle in the hills overlooking Cannes.

Outside, some 800 guests--journalists, film distributors, hoi polloi--mill around the lavishly redecorated grounds, nibbling on bits of ham, turkey and beef roasted on spits, bean and vegetable dishes and Hobbit Bilbo Baggins’ birthday cake while sipping beverages from brown foam mugs. At one end of the grounds musicians dressed in medieval-style garb play pipes, and a disco singer wails at the other.

Sunday night’s party capped a feverish 72-hour media onslaught, as New Line Cinema unleashed a 26-minute preview of “The Lord of the Rings”--the first glimpse at the live-action version of J.R.R. Tolkien’s trilogy, the well-known fantasy-adventure saga that publisher HarperCollins says has sold more than 100 million copies worldwide.

Spending a reported $2.5 million on the event, New Line had the castle and environs done up rather like a Renaissance faire, complete with costumed Middle Earthlings and gargoyles and a wooden swan boat floating in the swimming pool.

Sometimes described as an ambitious attempt to create an alternate mythology for the British Isles, “The Lord of the Rings” is the tale of a band of hobbits (diminutive human-like creatures with hairy feet), elves and men who band together to return a magic ring to its origins in Mount Doom.

Most studios wait to see how the first film performs before making any sequels. However, New Line is gambling that global audiences have such a pent-up appetite for this otherworldly extravaganza that it has made three films at once, at the cost of $270 million, under the supervision of “Heavenly Creatures” director Peter Jackson, a small, round, curiously Hobbit-like man (although the black tufts of hair sprout from his head and not, presumably, his feet).

Written by Jackson, Frances Walsh and Philippa Boyens, the films star teen heartthrob Elijah Wood, as well as English thespians McKellen and Ian Holm, Australian Oscar nominee Cate Blanchett, and American beauties Liv Tyler and Viggo Mortensen. The first installment is scheduled to open Dec. 19.

For some festival-goers, Cannes is all about the competition films from respected and interesting new directors. Many concentrate on buying or selling films at the concurrent film market or buttonholing financiers to get their dream projects off the ground.

But it is also about hype--raising the public profile of films that aren’t ready yet but will hit theaters within the next year or so. Attention-getting devices in years past include flamboyant producer Mario Kassar hosting big parties aboard an enormous yacht in Cannes harbor to promote the Arnold Schwarzenegger vehicles “Total Recall” and “Terminator 2: Judgment Day.”

Those days are gone, but opportunities for hype still abound. New Line seized the chance this year to screen the “Rings” promo reel for constantly rotating shifts of journalists, as well as the company’s foreign distributors. A platoon of the film’s actors also has been flown in for the occasion. The footage consists of snippets from the first movie, a six-minute action sequence, as well as glimpses of the second and third installments.

The company assembled a work force of 150 employees to sell the film to 300 journalists from around the world. The journalists were shown the footage at a local theater, not far from the Palais de Festivals, where the official film festival is taking place. They were then bused more than half an hour to this castle for a press conference and round-table interviews or TV interviews. One day was devoted to the print press and two to TV crews.

Almost all the journalists asked repeatedly whether the actors had read the Tolkien books before they were cast in the movie, and the lesser-known actors were repeatedly queried about how it felt to have landed a potentially career-changing break. Much of the cast--with the singular exception of the four young lads who play the hobbits--smoked through the interview sessions. Some of the foreign journalists requested autographs when the sessions were over.

Some of the questions lobbed were specific to the country of origin of the journalist. For instance, when Christopher Lee, the English actor who plays Saruman, and who happens to be a Tolkien fanatic, mentions that some of the Tolkien mythology is derived from Old Norse legends, one happy Icelandic journalist pipes up, “Does this film prove that it is possible to film an Icelandic saga? We’ve been waiting a long time for that.”

New Line is no stranger to the art of hype (these are the folks who put the phrase “shagadelic” into the Oxford English Dictionary). Yet this soiree is, in the words of Rolf Mittweg, New Line’s head of marketing and distribution, “the biggest event we’ve ever done. We’ve been preparing for it since last December. This event will create amazing publicity around the world.”

The $2.5 million for the Cannes shindig is just a drop in what Mittweg estimates as the trilogy’s $150-million marketing outlay.

Still, the mood of the New Line executives, which seemed tense in the days before the junket, appeared to be growing lighter by the minute, as the promo reel played to enthusiastic cheers at several different press screenings. According to the studio, it received a rousing standing ovation from a crowd of foreign distributors, who along with German and New Zealand tax funds, have put up 65% of the trilogy’s total budget.

After the early morning press screening, a jubilant Bob Shaye, New Line’s co-chairman, said, “We’re excited from the reaction that we’ve gotten from people who could have gone either way with it. You’re always nervous when a film opens.”

Shaye won the right to make “Lord of the Rings” after Miramax, which first developed the material with Jackson, passed because the company did not want to make more than one movie. (According to one New Line source, Miramax co-Chairman Harvey Weinstein, who’s in Cannes, requested an invitation to the screenings but never showed up.)

“It was a meeting between Bob Shaye, Peter Jackson, Fran Walsh [Jackson’s producer and wife] and myself,” says Mark Ordesky, the film’s executive producer, and point person at the studio. At that time, Jackson was pitching all the studios with a 280-page script, a 38-minute video presentation, and the idea of making two films at once. “After the pitch, Bob, who is a difficult guy to read, said, ‘But the book is a trilogy. Why are you making two films? You should be making three.’ Peter got this look in his eye, like, ‘Dare I hope someone is actually saying these words to me?’ ”

While New Line can certainly save money by making three films at once, the company loses the opportunity to work out the kinks of the franchise for the sequel. For instance, “Austin Powers: The Spy Who Shagged Me” did close to four times the business of the first one, and “The Mummy Returns” is expected to outgross the original by $35 million domestically alone.

Although all involved with “Lord of the Rings” deny that the trilogy is a make-or-break proposition for the studio, tongues have been wagging for months that this is exactly the case--that the studio is in precarious danger of becoming merely a releasing label for Warner Bros., a brand stuck on certain niche projects, rather than an independent production entity.

It’s hard to ascertain the truth behind the gossip, but it is true that New Line has had a tough year. It was hit hard by the post-merger layoffs at AOL Time Warner. A hundred people were laid off from New Line’s 500-person staff. The cuts were so deep in the production staff that the company recently was forced to rehire some people. Furthermore, longtime production president Michael De Luca, a veritable son to Shaye, was let go in January after the $80-million Adam Sandler dud “Little Nicky” and the Kevin Costner disappointment “13 Days.” Late last month, the Warren Beatty vehicle “Town & Country” opened and quickly tanked, costing the studio a rumored $90 million.

New Line execs are flying to New York next week to present the “Lord of the Rings” footage to AOL Time Warner executives.

The point of the Cannes 2001 hoopla is “to launch the trademark,” says Mittweg. “Even though it has nothing to do with the festival per se, our international distributors are here, the foreign press is here, and a good part of the domestic press. Which makes it an automatically amazing launching pad. You have the old country where you can find amazing castles like this.”

“The film is a global film. It’s global in terms of its ambitions, economically, artistically,” says Ordesky. “There’s an international cast with Brits, Aussies, New Zealanders and Americans. The books themselves are sold in 40 languages. In that context, Cannes is the perfect place.”

New Line also flew in a dozen American journalists, including Harry Knowles, who runs the influential aintitcoolnews.com Web site. Knowles has also visited the set in New Zealand, from which he posted effusive descriptions. Indeed, at the junket, the burly redhead in a Hawaiian shirt was even hugged by Wood, who plays Frodo, the film’s lead.

“Harry is a fanatic,” Mittweg says. “He knows this trilogy so well. He is a total fan and geek for ‘Lord of the Rings.’ ”

“There are people who are waiting for this film with an anticipation which could prove fatal to them,” said McKellen, drolly, at one of the round-table interviews. “They’ll die of the thrill of expectation. The Web site has received 400 million hits.” Cast member John Rhys-Davies counters, “You’re exaggerating slightly. It’s 357 million.”

Indeed, the company has created a particularly elaborate Internet presence. In addition to the official Web site, which comes in 10 languages, the company has sponsored 40 fan-created Web sites. In a sign of corporate synergy, AOL even ran a contest in which fans could win a trip to this “Lord of the Rings” party. The company has been using its Internet site to reassure the book’s hard-core fans of the film’s integrity and loyalty to the Tolkien vision.

“The expectation from the fans will ensure the film will have a big opening weekend. You can bet money now that this film will have the biggest opening weekend in the history of cinema,” adds McKellen, who plays Gandalf the Grey. “What I’m convinced of is that Jackson has made [this world] available to the ordinary cinema-goer who has no intention of reading the book.”