With a run of hits including The Graduate, Rain Man and Tootsie, Dustin Hoffman became one of the most successful film stars of the 70s and 80s.

Now back in the limelight, he tells Streve Pratt about falling out of love with the movie industry - and the problems of being a parent.

Becoming a pensioner has been good for Hollywood actor Dustin Hoffman. His star may not be as high in the Hollywood firmament as it once was but, at 65, he seems much more relaxed and happier.

For evidence, look no further than his appearance on Graham Norton's Channel 4 show last year when he sportingly entered into a Big Brother sketch, adopting a Geordie accent in an impersonation of fireman Johnny.

He was back on Norton's programme recently, when he insisted on telling a joke involving the c-word. Most other US stars would be scared of spoiling their image to do that.

Hoffman arrives for the interview carrying a bulging briefcase (although its contents are never revealed) and insists on telling a joke, although one considerably less rude than his TV gag.

Perhaps the man who played foul-mouth comedian Lenny Bruce on screen is just a frustrated stand-up comic himself. He raves about British funny man Johnny Vegas whom he'd seen at the Empire Film Awards the previous evening.

"He's not just funny, his humour is sometimes profound. It's like he's got Brendan Behan and Dylan Thomas coursing through his veins," enthuses Hoffman, before asking: "You want to hear a good joke with a bad accent?".

As if anyone would dare say no. "There's a Scotsman wearing a kilt, sleeping underneath a tree. A Scottish lass is walking by, and figures this is her best opportunity to check to see if he wears anything underneath the kilt. She tiptoes up to him, lifts the kilt up and, sure enough, he is fully exposed.

"She's so excited she takes the blue ribbon out of her hair and ties it around his privates, and gently puts the kilt down again. A couple of hours later he wakes up and feels something under his kilt. He lifts up his kilt and says, 'I don't know where you've been but wherever it is you got first prize'."

This is the last thing you expect from Hoffman, whose search for motivation so infuriated Laurence Olivier on the set on Marathon Man that the British knight snapped: "Why don't you just try acting?".

Perhaps that attention to the Method school of acting stemmed from finding fame relatively late. He was 30 when cast as the considerably younger Benjamin Braddock in The Graduate, earning the first of seven Oscar nominations. Two of them, for Kramer Vs Kramer and Rain Man, were converted into wins. His run of successes - which also included Midnight Cowboy, Tootsie, All The President's Men and Straw Dogs - made him one of the most successful movie stars of the 1970s and 1980s.

He's been less productive during the past decade. "I'm still wondering myself about the break from filming," he admits.

"The short answer is that I'd always been rather picky. Starting with The Graduate, I'd averaged about one film a year. For a movie star, that's not a lot, and I say movie star because they tend to get offered a lot of stuff. You'll find with a lot of my peers that they've done two or three times the number of films I have.

"I had a certain criteria that, if I had it to do all over again, I wouldn't change. I wanted a part that I thought I had a way into, a director that I thought was really good, a script that worked and all these other possibilities.

"Then I said maybe I should work more often. I hit a certain point where I decided that. Also we have six kids, and I made the decision that I was never going to be away from my kids."

Suddenly making so many films together took its toll and the message to stop was brought home to Hoffman in dramatic fashion as he was being driven to work at 6.30 one morning. "I thought I was going to vomit. I started out seeing that sound stage and I'd get goose bumps," he says.

"I just didn't like what had happened to the industry and I didn't like what had happened to me as part of it, and I just backed off. Since then I've started writing, and I'm still trying to do a couple of the things that I was writing, as a director or actor."

He seems to have regained his confidence and a new outlook on life and work, tackling four cinema projects, one after another. "What I'm loving is being able to choose projects now simply on the basis of the people I want to work with. I just want to have good working experiences, and let the dice fall where they may," he says.

The film that started this latest run was Moonlight Mile in which Hoffman and Susan Sarandon play parents of a girl shot in a random restaurant killing. They are depending on her fiance (played by Jake Gyllenhaael) as they cope with their grief.

The film was a personal project for writer-director Brad Silberling, whose own actress fiancee was gunned down on her doorstep. That personal connection to the story was one thing that attracted Hoffman to the movie. As a family man - four children from his second marriage, a daughter and a stepdaughter from his first - the story has other resonances.

"My wife and I have our own philosophy of parenting. You live and learn," he says. "Our philosophy is that you have to set a framework. It's not a democracy, it's your house. It becomes their house if they share in the rules. What you learn as a parent early on is that they become smarter than you at a very early age. You can't con them, because if they get you into a discussion or a debate, you are lost.

"Then there's the shock when they hit 18. They're exactly what they say, they're their own person and they're free to make their own mistakes. You can only offer your advice. As far as the hard stuff is concerned, meaning drugs and sex, we somehow fell into a thing of not saying no but describing the consequences if you don't practice safe sex, what happens if you smoke cigarettes."

He and his wife made a rule they'd never try to aim their children towards acting "because it's such a dangerous move to make". But they've heard Hoffman talk about the business that hasn't changed since he began 40 years ago, with 90 per cent of actors out of work and the other ten per cent not necessarily the best, just good at getting the job.

He says: "If you're going to be an actor, a writer, an artist of any kind, you'd better love it, under the condition that you're going to fail for a lifetime.

"It's certainly true of me, and my friends Gene Hackman and Bob Duvall, we'd still be doing it because we wanted to be in there. We never expected any of this. If someone reached down from heaven with a pen and said, 'sign here, you're going to be in a repertory company for the rest of your life, just playing small parts, but you'll be employed constantly', we would have signed it like that. We just love the life."

* Moonlight Mile (15) is now showing in cinemas.