An official inquiry into the former BBC religion editor’s actions found he used “deceitful behaviour” and was in “serious breach” of the broadcaster’s producer guidelines when arranging his interview with Diana, Princess of Wales.
Mr Bashir, who recently stepped from his BBC role due to ongoing health issues, said in a statement after the report's findings were released: "This is the second time that I have willingly fully co-operated with an investigation into events more than 25 years ago.
"I apologised then, and I do so again now, over the fact that I asked for bank statements to be mocked up. It was a stupid thing to do and was an action I deeply regret.
"But I absolutely stand by the evidence I gave a quarter of a century ago, and again more recently.
"I also reiterate that the bank statements had no bearing whatsoever on the personal choice by Princess Diana to take part in the interview."
Bashir breached BBC rules by mocking up fake bank statements and showing them to Diana’s brother, Earl Spencer, to gain access to the princess, the report said.
The report was done by Lord Dyson, the former master of the rolls and head of civil justice, who was appointed to look into the circumstances surrounding the explosive 1995 interview, which famously featured Diana saying: “Well, there were three of us in this marriage, so it was a bit crowded.”
The report said: “Without justification, the BBC fell short of the high standards of integrity and transparency which are its hallmark by covering up in its press logs such facts as it had been able to establish about how Mr Bashir secured the interview and failing to mention Mr Bashir’s activities or the BBC investigations of them on any news programme.”
Former director-general Lord Tony Hall, who was director of BBC news and current affairs when the Diana interview was screened, has apologised that the inquiry “fell well short of what was required”.
He said: “I have read Lord Dyson’s report, and I accept that our investigation 25 years ago into how Panorama secured the interview with Princess Diana fell well short of what was required.
“In hindsight, there were further steps we could and should have taken following complaints about Martin Bashir’s conduct.
“I was wrong to give Martin Bashir the benefit of the doubt, basing that judgment as I did on what appeared to be deep remorse on his part.
“Throughout my 35-year career at the BBC, I have always acted in ways I believe were fair, impartial and with the public interest front and centre.
“While Lord Dyson does not criticise my integrity, I am sorry that our investigation failed to meet the standards that were required.”