After spending the past 6 months developing the pic, Steven Spielberg has withdrawn from “Harvey.” The film would have been his first directing vehicle for the reconstituted DreamWorks. Spielberg delivered the news to 20th Century Fox, which had earmarked soundstages on the lot for an early 2010 production start. Fox had agreed to have DreamWorks finance 50% of production through its new funding relationship with Reliance, and either distribute domestically or internationally through its arrangement with Disney.

The film was to be an adaptation of Mary Chase’s Pulitzer Prize-winning play about a man who befriends a six and a half foot tall invisible rabbit and has been a challenge to pull together since Spielberg committed last August. One of the biggest challenges has been signing a star to play Elwood P. Dowd, the character played by James Stewart in the 1950 film.

Spielberg’s first choice was Tom Hanks, but the actor who is often regarded as a modern day Stewart wanted no part of taking over a role played by the iconic star. Spielberg and Fox spent several months courting Robert Downey Jr. While the star didn’t commit, he made suggestions on rewrites of the Jonathan Tropper script. He and Spielberg never found themselves in creative sync on the script, and the director finally called the whole thing off.

A spokesman confirmed Spielberg’s exit, but wasn’t specific about the reason. Fox 2000 will continue working on “Harvey” and could re-approach Spielberg and Downey.