Lord Dyson’s probe concluded that the TV journalist was in “serious breach” of BBC rules by using fake bank statements to help gain the trust of Diana’s brother Earl Spencer and set up the 1995 interview.
In response to the findings, Mr Bashir apologised and said the faking of bank statements was “an action I deeply regret” – but added he felt it had “no bearing whatsoever on the personal choice by Princess Diana to take part”.
The inquiry also found the BBC “fell short of high standards of integrity and transparency which are its hallmark” over the interview.
Lord Dyson was appointed by the broadcaster last year to look into the circumstances surrounding the interview, in which Diana said of her relationship with Prince Charles: “Well, there were three of us in this marriage, so it was a bit crowded.”
The inquiry found Mr Bashir had commissioned fake bank documents purporting to show payments in the bank account of Alan Waller – a former employee of Earl Spencer – and two former members of the royal household.
Mr Bashir used them to gain Earl Spencer’s trust to persuade him to introduce him to his sister and land the exclusive interview, in which Diana made explosive claims about the state of her marriage.
The journalist – who left his position as the BBC’s religious affairs correspondent last week – said he apologised “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”.
However, he said he remained “immensely proud” of the interview and claimed “the bank statements had no bearing whatsoever on the personal choice by Princess Diana to take part in the interview”.
He added: “Evidence handed to the inquiry in her own handwriting (and published alongside the report today) unequivocally confirms this, and other compelling evidence presented to Lord Dyson reinforces it.”
Lord Dyson’s report found Mr Bashir breached BBC rules by mocking up the fake bank statements and “used deceit” in his dealings with Earl Spencer to help arrange a meeting with Diana.
However, the report also found Diana “would probably have agreed to be interviewed by any experienced and reputable reporter in whom she had confidence even without the intervention of Mr Bashir”.
A letter, which was included as evidence in the Lord Dyson report, written on officials Kensington Palace stationery and signed by Diana said: “Martin Bashir did not show me any documents, nor give me any information that I was not previously aware of.
“I consented to the interview on Panorama without any undue pressure and have no regrets concerning the matter.”
The inquiry also found Mr Bashir had later lied about events by telling BBC managers he had not shown fake statements to anyone.
The report said Bashir was “unable or unwilling” to offer a credible explanation of why he had commissioned the documents, but BBC bosses had accepted his account as “truthful”.
Former director-general Lord Hall has said he accepts the BBC’s 1996 inquiry into how Panorama secured its interview “fell well short of what was required” and he was “wrong to give Martin Bashir the benefit of the doubt”.
Lord Hall expressed his “deep remorse” over the internal probe. “While Lord Dyson does not criticise my integrity, I am sorry that our investigation failed to meet the standards that were required,” he said.
The current BBC director-general Tim Davie also apologised after the report’s release on Thursday, saying. “While the BBC cannot turn back the clock after a quarter of a century, we can make a full and unconditional apology. The BBC offers that today.”
The BBC previously delayed the broadcast of a new Panorama investigation into the historic interview.
The programme was expected to air on BBC One on Monday but was postponed due to a “significant duty of care issue”, the broadcaster said. It will now air on 20 May, following the publication of Lord Dyson’s report.
Mr Bashir left the corporation last week on health grounds. He has been seriously unwell with Covid-related complications.
BBC chairman Richard Sharp said: “The BBC Board welcomes the publication of Lord Dyson’s report which it unreservedly accepts. There were unacceptable failures. We take no comfort from the fact that these are historic.”
TV watchdog Ofcom has said previously it will not launch its own investigation into the BBC Panorama controversy, but would follow the independent inquiry “closely”.
Ahead of the publication, Earl Spencer shared a black and white family photograph of himself and Diana as children. He posted the image on Twitter alongside the words: “Some bonds go back a very long way.”
Prince William welcomed the launch of the investigation late last year, saying it “should help establish the truth behind the actions” that led to the programme.
The Independent has contacted Kensington Palace for comment on the Dyson report.