(Reuters) - A mouth-watering finale to the season ended before it even began on Sunday when Roger Federer was forced to pull out through injury prior to his ATP World Tour Final showdown with world number one Novak Djokovic.

The 33-year-old Swiss, who spent two hours 48 minutes defeating compatriot Stanislas Wawrinka in a brutal semi-final the previous night, announced his decision on court as the 17,000-seat O2 Arena filled up for the expected final.

World number two Federer, who was bidding for a seventh title at the year-ender, apologized but told the crowd he was not "match-fit" after developing a back problem.

Looking as stylish as ever as he stood on the blue indoor surface wearing a red and grey cardigan, Federer apologized, saying: "I hope you understand I wanted to come out personally and excuse myself for not playing ... I can't compete without a back at this level."

Despite the huge anti-climax for the crowd, some of whom had forked out thousands of pounds for a courtside ticket, there was no booing, with applause breaking out as the seven-time Wimbledon champion spoke.

Explaining how the injury arose, Federer said later: "I was feeling great until yesterday's tiebreaker. I felt all of a sudden the back was feeling funny.

"I tried to have treatment on it, medication, just tried to turn around as quick as possible really, but didn't really feel much of an improvement overnight."

Djokovic becomes the first player to win the Tour Finals title three years in succession since Ivan Lendl (1985-87) but was not really in the mood for celebrating when he collected the trophy and $1.92 million check.

"Obviously not the way I'd like to win this," the 27-year-old Djokovic, who clinched the year-end world number one ranking for the third time in four years this week, said.

"I feel sorry for Roger. I've been in tennis 10 years and I know Roger and Rafa (Nadal) have been the biggest competitors and always give their 100 percent. If Roger could have come out and played he would have played.

"I'm not the kind of player to celebrate these wins, but I have to celebrate the whole season and this trophy is the crown on the season," he added.

To appease disappointed fans, home favorite Andy Murray, thrashed by Federer in the week, agreed to play Djokovic in a one-set exhibition match, before partnering with John McEnroe in a doubles game against Tim Henman and Pat Cash.

Federer now faces a battle to be fit for the Davis Cup final against France which starts on Friday.

Along with the Olympic singles title, the Davis Cup is the major honor that still eludes the 17-time grand slam champion, with Switzerland's hopes resting on the shoulders of him and Wawrinka.

"The way I feel right now there's no way I can compete at any level really," Federer said. "Probably in a few days it's going to be better."

(BY MARTYN HERMAN; Editing by Mark Meadows and Ian Chadband)