Such is Del Toro's standing that he has now been handed the reins on two prequels to Peter Jackson's Lord of the Rings trilogy: The Hobbit, and a second movie designed to bridge the gap between Tolkien's seminal Middle-Earth novel and Jackson's first LOTR instalment.
But if you think this means studios are falling over themselves to fund all things Del Toro, you're wrong. When he began looking for backing for Hellboy II: The Golden Army, the sequel to his 2004 cult hit, Hellboy, he hit a brick wall. Actually, several brick walls.
Bringing Mike Mignola's demonic comic book character to the screen had been difficult first time around, recalls Del Toro. But since Hellboy made a combined profit of around $90 million theatrically and on DVD, getting another movie into production should have been a breeze, comparatively speaking. However, Sony passed on it, as did Paramount. It was Universal, where Del Toro had developed the first film – before the studio abandoned the project – who brought Hellboy back in from the cold.
The problem, according to Del Toro, is that the studios are becoming more conservative. "I don't mean politically but creatively, which I guess is a political act," he explains. The protagonist's name didn't help, either. "American theatres in the South rejected the first movie, refused to play it, because the word 'hell' was in the title," he says. "Other theatres in the South changed the title on the marquee from Hellboy to Hello Boy, and Heck Boy."
He thought when he was pitching Hellboy II: The Golden Army that people would be less sensitive, but not so. "We actually went back to discussing, 'Can it not be called Hellboy?' Again!" he exclaims, aghast.
"I find it really puzzling that we are not prudish about the deforestation of the Earth, bombing other countries, killing children, raping entire continents, but we are prudish about one word."
I can feel Del Toro's anger rising. "It's almost like good manners at Hitler's table in today's politics," he says. "There is a politically correct fascism racing on the horizon in Europe and America, everywhere, and it's very disturbing."
Of course, Hollywood is Hollywood, and all anyone is really worried about, ultimately, is the bottom line. "When the studios invest, they want to invest in a sure thing, or what they think is a sure thing, and this movie doesn't play that safe."
He can say that again. Hellboy II must surely be one of the only mainstream movies since Rosemary's Baby to feature a woman (Selma Blair's combustible Liz) impregnated by a demon (Hellboy, played by Ron Perlman). But whereas Roman Polanski presented the idea as something horrific, this time it is love. How's that for subversive? Hellboy, moreover, likes to smoke and get drunk, though he can always be relied upon in a tight spot. This is why Del Toro loves him so much.
"He represents everybody's father's generation," he says, affectionately. "He's sort of the guy that you would like to hang out with as your pub buddy, and he's very, very blue-collar. He represents the guy that chomps cigars and gets the job done, and who believed in the basic decency of mankind. It's a lost archetype, I think, and Hellboy kind of embodies it."
Del Toro was raised in a strict Catholic household, against which he chafed from a young age. A lonely child, he sought solace in his imagination. The monsters he drew – and continues to draw, in notebooks – frightened his pious grandmother. "It's funny, but it was not funny at the time: she went in with a vial of holy water and tried to exorcise me for the shit I was drawing. I started laughing and she got so scared that she threw more at me."
I ask him if there was a taboo-breaking appeal to making movies where the hero is a devil. Not really, he says. "Even as a kid, I knew that monsters were far more gentle and far more desirable than the monsters living inside 'nice people'. I think being a monster, and accepting that you are a monster, gives you the leeway to not behave like one. There are truths about oneself that are really bad and hard to admit. But when you finally have the courage and say them, you liberate yourself. And monsters are a personification of that."
So was there a defining moment when Del Toro became liberated? There was, he says, citing the protagonist's acknowledgement of the "indifference of the universe" at the end of Camus' existentialist novella, The Outsider. "That is a great moment of revelation, and I think horror films are that," says Del Toro. "There are two types: the repressive one and the liberating, anarchic one. When you acknowledge anarchy, you get free."
His imagination certainly runs riot in Hellboy II, which features stranger creatures than the first film. More than any of his previous movies, it melds together the fantasy and action-movie sides of his film-making.
Freedom, though, came at a price, and in order to make the film he wanted, Del Toro and his producers gave up part of their salaries and back-ends. "Budgetarily, the first one was $66 million, this one is $85 million, but the ambitions fuelling this one wanted it to be like a $200 million movie," he says.
"So that paradox caused a lot of friction. Fortunately, it got resolved. We lost some stuff, but I think the movie survived beautifully."
The results are astonishing, with every detailed frame lovingly realised. Where the first film featured five different creatures, the new one has 32, Del Toro says proudly. Even so, although he rates the freedom he had on the film as 9 out of 10, he still finds it tough going back into the studio system after making Spanish-language films like The Devil's Backbone and Pan's Labyrinth, because of the notes studios give to directors.
"People know that, even in the nicest ways, I am allergic to ideas and memos," Del Toro sighs. "I deal with them as good as I can, I try to help myself, but I'm not a very memo-friendly guy, sadly. I love making movies like The Devil's Backbone and Pan's Labyrinth, where I can wake up in the morning and change the entire story, and it's up to me. And why shouldn't it be that way? I really question, as a storyteller, why shouldn't it?"
This makes me wonder how he is going to survive working in New Zealand for four years on the Tolkien movies. According to some reports, he turned down the offer to direct a Harry Potter film because he felt he would be trapped by someone else's vision. So what is the difference?
First of all, he says, Tolkien was a part of his childhood in a way that JK Rowling, obviously, was not. "As an 11-year-old, The Hobbit hit me at the right time. So I think I'm more akin to that universe. If I had read Harry Potter at age 11, nothing would have stopped me from doing it," he insists.
As for the freedom issue, he believes that he and Jackson, who will executive produce the prequels, "have a great understanding". "We both know that The Hobbit, as a book and as an entity, is very different from the trilogy, but that the second movie needs to meld into the trilogy. So I believe I'm going to have full autonomy to rule that world within the parameters and confines that we mutually have agreed are necessary to preserve."
He tells me a story about the actor Federico Luppi, who told him when they were making Del Toro's acclaimed vampire movie, Cronos, that he could only feel free in a scene when he knew what the limits were.
"That's the same thing with The Hobbit," he says. "I know exactly where I shouldn't violate (Jackson's] trust or his confidence, or the world he has created, and I intend to be respectful of that. But within those limits, I intend to be fully free."
I still wonder how Del Toro is going to cope with being away from his base in LA for so long. When The Hobbit came to him, he was in the process of setting up a "man-cave of epic proportions" in a house separate from the one he shares with his wife and two daughters, to store his collection of 7,000 DVDs, 15,000 comic books, and movie memorabilia. "My collection of crap was getting so big that my wife said, 'Dude, it's you or us.'" His prized possessions will now be looked after by a "like-minded friend" while he is away. But what about the rest of the family? How do his children feel about being uprooted?
"Well they're old enough to understand they've got to go," Del Toro laughs. "It's an adventure. We have lived in Madrid, we have lived in Prague, we have lived in Budapest, we have lived in Canada, we lived in Mexico, we have lived wherever the movies take us. And we will do it again." Clearly nothing is going to stop Del Toro. And cinema is all the richer for that.
Hellboy II: The Golden Army is released on 20 August.