Former director-general Lord Tony Hall has said he was “wrong to give Martin Bashir the benefit of the doubt” and apologised that a BBC investigation “fell well short of what was required”, as a report into how the journalist secured his Panorama interview with Diana Princess of Wales, was published.

Lord Hall was director of BBC news and current affairs when the Diana interview was screened.

He is criticised in the investigation 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.”

In a statement to the PA news agency, 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.”

Diana’s now infamous Panorama interview in 1995 sent shockwaves through the monarchy with details about the state of her marriage to the Prince of Wales.

Diana’s brother, Earl Spencer claimed that in the weeks before the programme, Bashir showed him forged bank statements that related to alleged payments made to his sister’s former private secretary Patrick Jephson and another former royal household member by the security services.

The documents falsely suggested the individuals were being paid for keeping the princess under surveillance.

He also showed him mocked-up documents, relating to a former employee of the earl, that Bashir also used as he tried to gain access to the princess.

In 1996 the BBC held an internal investigation which examined the mocked-up documents relating to the earl’s former employee, as it tried to determine whether or not the princess had been misled, with a key piece of evidence, a note from Diana, suggesting she had not.