The Hollywood Reporter is reporting that Disney has declined to exercise its option on the next installment of the Chronicles of Narnia, “The Chronicles of Narnia: Voyage of the Dawn Treader.” The movie, which was slated to hit theaters in May 2010, is now in limbo:

While declining to elaborate, Disney and Walden Media confirmed Tuesday that for budgetary and logistical reasons the Burbank-based studio is not exercising its option to co-produce and co-finance the next “Narnia” movie with Walden.

The third entry in the series, based on the classic books by C.S. Lewis, was in preproduction and set for a spring shoot for a planned May 2010 release. The development puts the participation of the talent attached in doubt. Michael Apted was on board to direct a script by Steven Knight. The key players of the second installment, “Prince Caspian” — Ben Barnes, Georgie Henley, William Moseley and Anna Popplewell — were to return for the third film.

Walden has a strong relationship with the Lewis estate and will shop “Treader” in hopes of finding a new partner. The most likely candidate at this stage is Fox, which markets and distributes Walden fare under the Fox Walden banner.

Hopefully, a new distributor will be found, and one that will fully support the films without compromising the stories. While news like this is disturbing, we must remind ourselves that we do have the books themselves, which are treasures whether they are made into movies or not.

HT: Tim Challies