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 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.
It meant Djokovic became the first man to win the title three years
in succession since Ivan Lendl in 1987.
World number two Federer, who was bidding for a seventh title at the
year-ender, apologised 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 apologised, 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 seven-times Wimbledon champion Federer
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."
It was only the third time in a career spanning nearly 1,000 matches
that Federer has withdrawn because of injury.
Djokovic was not really in the mood for celebrating when he
collected the trophy and a $1.92 million cheque.
"Obviously not the way I'd like to win this," said the 27-year-old,
who clinched the year-end world number one ranking for the third
time in four years this week.
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"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 favourite Andy Murray, thrashed
by Federer in the week, agreed to play Djokovic in a one-set
exhibition match, before partnering John McEnroe in a doubles game
against Tim Henman and Pat Cash.
Federer now faces an anxious week as he tries to recover for the
Davis Cup final against France in Lille next weekend.
Along with the Olympic singles title, the Davis Cup is the major
honour which still eludes the 17-times 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."
(Editing by Mark Meadows and Ian Chadband)
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