Warner Bros. says director Steven Spielberg has the magical touch it needs for the first movie adaptation from the enormously successful Harry Potter children's books.

Warner expects Harry Potter & The Sorcerer's Stone to be Spielberg's next project, The Times of London reports - and Spielberg is rumoured to be toying around with making the movie a computer-animated version of the book.

Spielberg - who directed ET and who may be the most popular kids' movie director of all time - agreed to take on the job after getting an exclusive look at the first draft of Warner Bros.' script adaptation last month, The Times says.

The Sorcerer's Stone is the first book in J. K. Rowling's enormously popular series about an orphaned boy who discovers he has magical powers.

Spielberg beat out several top-name directors for the job - including Robert Zemeckis, Jonathan Demme and Mike Newell.

To do Harry Potter, Spielberg will have to put off other projects. He had been trying to choose between two sci-fi projects: Minority Report, with Tom Cruise, and AI, a project his late friend Stanley Kubrick never finished.

Spielberg will have to forgo using his own studio, DreamWorks, to work for rival studio Warner Bros.

According to The Times, Warner, which owns the rights to the book, is trying to cash in quickly on the Harry Potter sensation by insisting on making the film Spielberg's next project.

Harry Potter & The Sorcerer's Stone and its two sequels have sold over 5.5 million copies in America and 2.5 million in Britain - mostly to elementary-school age kids who have taken a wild interest in Harry's magical world.

If Spielberg decides on a live-action version of The Sorcerer's Stone, he'll need a young actor to play the title character of the film, which is expected to have a budget between $130 million and $160 million.

One candidate may be Jonathan Lipnicki, the nine-year-old star of Stuart Little and Jerry Maguire. Lipnicki told The Post he was a big fan of the Harry Potter books and would love to play Harry.