More than 18,000 people have complained to the BBC over the broadcast, which saw social affairs correspondent Fiona Lamdin repeat a racial slur allegedly used in a suspected racially-motivated attack in Bristol.
The broadcaster initially defended the report, but director general Lord Hall said in a statement on Sunday that the BBC “now accepts that we should have taken a different approach at the time of broadcast and we are very sorry for that”.
He said the report had caused “distress” to many, adding: “Every organisation should be able to acknowledge when it has made a mistake. We made one here.
“It is important for us to listen – and also to learn. And that is what we will continue to do.”
The BBC would be changing its guidance on offensive language in its output, he added.
The story ran on the BBC News Channel and local news programme Points West on July 29, but the broadcaster stopped running the report which featured the offensive language later that day.
“It should be clear that the BBC’s intention was to highlight an alleged racist attack,” Lord Hall said.
“This is important journalism which the BBC should be reporting on and we will continue to do so.
“Yet despite these good intentions, I recognise that we have ended up creating distress amongst many people.”
The statement was issued after Lord Hall held a meeting with BBC colleagues on the issue.
On Saturday, BBC Radio 1xtra presenter Sideman announced that he was quitting the corporation over the broadcast.
Announcing the move on social media, he said the news report represented an “error of judgement”, adding it “feels like a slap in the face to our community”.
