Martin Freeman has reportedly turned down the starring role in The Hobbit, Peter Jackson’s next epic.

The Office star was offered a seven-figure salary to play Bilbo Baggins, according to The Sun, in the Lord of The Rings prequel film, based on JRR Tolkien’s classic novel.

But he apparently reluctantly declined as he was already committed to playing Sherlock Holmes’s sidekick Dr Watson in hit BBC drama Sherlock.

A source said: “It was one of the most difficult decisions of his career. MGM, who are making the film, only got a formal offer over in the last couple of weeks.

“It was too late for Martin because he had already signed up for another series of Sherlock. It was agonising but he had no other choice.”

Martin and Sherlock co-star Benedict Cumberbatch have signed up to 20 weeks filming a new series of the hit show next year.

The 38-year-old Love Actually star rose to fame playing Tim in The Office, and has also starred as Arthur Dent in the big-screen adaptation of cult sci-fi novel The Hitchhiker’s Guide To The Galaxy.

The Hobbit is the first Tolkien novel, and also features Gandalf and Gollum.

Lord Of The Rings trilogy director Jackson has now arranged auditions in London, New York and Sydney to find an unknown to play the lead.

The production was due to start filming in New Zealand this winter, with Andy Serkis and Sir Ian McKellen reprising their roles as Gandalf and Gollum, and Jackson producing, but has hit several setbacks, which led to director Guillermo del Toro, quitting the project, forcing Jackson to step into the breach.