Cutworm, one of the many kinds. Not sure what it metamorphs into though.

Various kinds of medium-sized moths.
http://www.extension.umn.edu/garden/insects/find/cutworms-in-home-gardens/

I cannot remember ever seeing anything like this before. I bought a tray of 6 dwarf rhododendrons and when I took them out of the tray to give them water I found this one. I hope there are no more but I will keep a look out now you have told me what it is.

How big is it?

3cms. I thought it was a young slug because it looked all mottled along the top. I picked it up and it was soft and velvety to touch.