Former BBC director-general Lord Tony Hall has said he is “deeply sorry” to the Duke of Cambridge for the “hurt” caused by the Panorama interview scandal involving Diana, Princess of Wales.

Lord Hall, who was managing director of news and current affairs at the time of the interview, has come under fire for the internal investigation he headed into how Martin Bashir landed the world exclusive.

Appearing before MPs on the Digital, Culture, Media and Sport Committee, he denied there had been a “BBC cover-up”.

He was also asked if he should forfeit some of his pension from the BBC to help cover the cost of Lord Dyson’s blistering report in May, which criticised the methods used by the former BBC journalist to obtain his exclusive 1995 interview with the princess and cost the BBC £1.4 million.

Both William and his brother the Duke of Sussex issued strongly worded statements following the publication of the Dyson report.

Appearing before the committee Lord Hall said he had not since spoken directly to William to express his remorse.

He said: “We did what we thought was right at the time, investigating Martin Bashir not once but twice.

“I have a huge amount of respect for the prince, I’ve worked with him on various things in the past and I’m deeply sorry for the hurt that this has caused to him and I do want to make that clear.”

Asked if he has spoken to the prince, Lord Hall added: “No I haven’t, I wanted to have that session with you all before I think about what I do next.”

Lord Hall, who was director-general of the BBC from April 2013 to August 2020, also led a 1996 internal inquiry into how Mr Bashir secured his bombshell interview with Diana.

He admitted it had been the “wrong judgment” to believe the journalist was remorseful for his actions and allow that to influence the final decision.

Asked why he had subsequently reported to the board of governors that Mr Bashir was an “honest and honourable man”, Lord Hall said: “In the end we came to a judgment about his lack of experience, that he was out of his depth, that he was contrite, and we gave him a second chance.

“We trusted him and it turns out we couldn’t.

“In that light I understand I am using words which when you look at them now just seem wrong.

DCMS Committee on the work of the BBC
Lord Hall (House of Commons/PA)

“But it was me trying to work out, ‘Could I trust this man or not?’”

Lord Hall said Mr Bashir was quizzed during the internal investigation for an hour-and-a-half and he was “in tears”.

John Nicolson MP said the Dyson report cost £1.4 million as a result of Lord Hall’s “negligence” and asked if he thought a “forfeit of some of your lavish BBC pension would be appropriate?”

Lord Hall replied: “Twenty-five years ago myself and everybody believed Bashir, we made a mistake but please don’t let that colour the other things that I have done.”

He added: “I’ve done a hell of a lot for the BBC and I think for the arts and I regret this one thing that we all got wrong because we were lied to by Martin Bashir 25 years ago.”

In a robust exchange, Mr Nicolson said: “There has been a BBC cover-up which is why you and the other witnesses are here.”

Lord Hall denied this, adding: “We have not tried to conceal from the public or anyone any of the conclusions we came to 25 years ago, the notion that there has been some consistent lying that we have drawn under this to try to conceal something from the public is not true.”

Martin Bashir
Former BBC News religion editor Martin Bashir (Ian West/PA)

A review into the decision to appoint Mr Bashir as religious affairs correspondent at the BBC in 2016 following the interview found “no evidence” the journalist was given the job to “contain and/or cover” up the events surrounding the programme and that Lord Hall did not play a part in the decision to rehire Mr Bashir.

Committee chairman Julian Knight said it was “utterly extraordinary” that the BBC would rehire Mr Bashir and asked how it came to be that a “known liar” was brought back to the corporation.

Lord Hall said he was not going to second guess the people who were filling the role, and added: “If we knew then what we know now, of course he wouldn’t have been rehired.”

Mr Knight said: “A cynic would suggest the process was entirely concocted so that the resolution at the end of the day was that Mr Bashir would get this job.”

The BBC has since apologised to the whistle-blower who tried to expose Mr Bashir’s methods.

Graphic designer Matt Wiessler was sidelined by the corporation after raising concerns that fake bank statements he mocked up for Mr Bashir had been used by the journalist to persuade Diana to do the interview.

“I regret the language that we used about Mr Wiessler and I think we could have managed it better,” Lord Hall said.