Warner Bros. has pushed back the release date for “The Quest for Camelot” to the summer of 1998, to give the production team more time to complete the studio’s first full-length feature from its animation division.

The picture had been planned for a release in November and was also tied to a major merchandising effort. Warner Bros. was preparing to go to next month’s Toy Fair, with Kenner licensed to make toys designed by the studio’s WB Toys. An agreement with fast-food partner Wendy’s for promotional tie-ins on the picture had also been in place, as well as a number of other licensing agreements.

But a major delay occurred when the studio pulled key animators off “Quest” to work on “Space Jam,” which had become a race to meet the release date last November. Animators for “Quest” now will have an extra two months to complete the picture, probably by the end of the year.

Studio execs now are in discussions with Wendy’s about staying on with “Camelot,” given the new release date. Li-censing agreements — such as that with Kenner — are expected to stay in place. WB may have avoided major dis-ruptions by deciding to move “Quest” at this point, rather than later in the year.

“Quest,” featuring the voices of Christopher Reeve, Jane Seymour, Gary Oldman and Don Rickles, among others, will be the first full-length animated feature to come out of its new division.

The animated musical revolves around a strong-willed girl and a handsome young man who are on a quest to van-quish the evil Baron Ruber and restore order to King Arthur’s kingdom.

Warner Bros., along with Fox and DreamWorks, are among the studios making forays into the feature animation business, hoping to capture a share of the box office and merchandising success Disney has had.

If it had stuck with a holiday release date, WB would have been releasing “Quest” in the same season as Disney’s re-release of “The Little Mermaid” and Fox’s first animated feature, “Anastasia,” which is scheduled for a Novem-ber release.

Other animated features on tap this year include Disney’s “Hercules” and “Cats Don’t Dance,” which was produced by Turner Pictures but will be released by Warner Bros.

With the summer 1998 release, Warner Bros. will be bringing out “Quest” in the same season as Disney’s “Mulan.” DreamWorks plans its first animated release, “Prince of Egypt,” near the end of 1998.

But studios other than Disney have found it less than easy to launch their animation divisions, which not only carry hefty overhead but also are competing for animation talent.

Sources say that there were continuity and story problems in early reels of “Quest,” although those have since been improved. And the pic also faced the departure of Bill and Sue Kroyer, the husband-and-wife team that produced “FernGully … The Last Rainforest.” They departed last summer, although they are still developing other projects with the studio.

Studio officials insist that footage has been positively received and story elements are coming together.

“We are certain that announcing the release date more than a year in advance will enable our animation team to complete the movie with the same expertise and commitment that they have demonstrated so far,” a Warner Bros. spokesman said.

Warner Bros. will still go to Toy Fair with a line of products geared to the release of “Batman and Robin” on June 20.

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