Permissions error using WordPress on local server

I have an installation of WordPress installed on Ububtu, using apt-get, on a machine with two NICs. (I installed LAMP prior to WordPress). WordPress works fine when browsing on the local machine (localhost/wordpress), and I can equally view other html content also located in the webroot folder /var/www.

I want to make it available via a local network (with wireless APs) on eth1. I have set this up with dnsmasq so that it redirects any URL back to the local server using address 10.0.0.1. It works with all my other content located in /var/www. From a connected computer on this eth1 network, I can view the other content, so the server is working fine.

But when I try to browse WordPress it gives this type of error:

/etc/wordpress/config-10.0.0.1.php could not be found. The file is either not readable by this process or does not exist.
Please check if /etc/wordpress/config-10.0.0.1.php exists and contains the right password/username.

Is this a permission error? I tried chmod 777 /var/www/wordpress but no luck.