Here's what I've found on the subject in a New Zealand online mag:
This week at the Oscars The Lord Of The Rings director Peter Jackson met one his idols, Beatle Sir Paul McCartney, and it was revealed the pair shared common ground.
While waiting in the lobby of Hollywood's Kodak Theatre, Jackson said today, he asked Sir Paul if it was true the Fab Four wanted to make a Lord Of The Rings film in the 1960s.
"He said it was and they'd been thinking of talking to (director) Stanley Kubrick about it. It was something John (Lennon) was driving and (Rings author) JRR Tolkien still had the film rights at that stage but he didn't like the idea of the Beatles doing it. So he killed it."
Jackson understood that Sir Paul was going to be Frodo, Lennon Gollum, George Harrison Gandalf and Ringo Starr would play Sam. "There probably would've been some good songs coming off the album."
Hope this helps.