Green Book takes place in 1962 as a Bronx bouncer (Mortensen) is hired to drive a world-class pianist (Ali) on a concert tour from NY to the deep South.
He said "For instance, no one says n****r anymore" while sitting next to his black co-star Mahershala Ali.
"We were ready for Mahershala or Peter to start talking again. and then he dropped i", a third person described on social media. "He started talking about how, in this climate, the world today, progress isn't going to happen quickly, it's going to happen slowly, but the movie is going to mean a lot for a long time because we're constantly coming up against racism and how racism is nearly human nature and these things come in waves". "I was hearing everybody passing by me going up the stairs going, 'That was insane!" Mortensen had this to say in a statement he issued following the incident.
One Twitter user said the context was discussing the impact of ignoring racism.
For many the actor missed the mark.
Lip went on to play crime boss Carmine Lupertazzi on the Sopranos following his chauffeur and bouncer gig.
The 60-year-old explained his goal behind using the term and said: 'Although my intention was to speak strongly against racism, I have no right to even imagine the hurt that is caused by hearing that word in any context, especially from a white man.
"In making the point that many people casually used the "N" word at the time in which the movie's story takes place, in 1962, I used the full word". I do not use the word in private or in public. I am very sorry that I did use the full word last night, and will not utter it again, ' he added.
He added that he took on the role with the objective of raising racial awareness.
He concluded by saying he signed on for Green Book because he wanted to "expose ignorance and prejudice in the hope that our movie's story might help in some way to change people's views and feelings regarding racial issues".