The director of Oscar-winning movie Precious got into an altercation with a producer on the set of his movie, in which racial slurs were traded.

Lee Daniels is currently in the process of working on The Paper Boy starring Zac Efron and Nicole Kidman, but things became a little tense when he got into an argument with producer Avi Lerner.

In the footage obtained by TMZ, parts of the argument are inaudible, but at one point, Avi says to Lee: "You call him a racist.  You know you're racist too.  You always pay attention to that."

Avi then threatened to fire Lee, adding: "I don't want you to leave, but if you don't apologize to me and you know you should...," before it gets cut off.

Towards the end of the clip, it becomes clear that the argument is about money, with Lee saying: "Need some money, need some money?" Avi replied: "We paid the scuba divers a lot.  Shame on you."

The film is reportedly over the $15 million budget, but reps for both Lee and Avi denied the incident was serious, telling the website: "Both parties laughed it off. We hope the footage also shows them hugging moments later."

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