Shilpa Shetty withdrew her accusation Thursday that she was a victim of racism on Channel 4's "Celebrity Big Brother", saying it had been made in the heat of the moment.
But the broadcaster was still under fire for its handling of the affair, which has escalated to the diplomatic level with senior Indian and British politicians weighing in on the controversy.
Mobile communications retailer the Carphone Warehouse said it had told broadcaster Channel 4 to remove its name and branding from the programme with immediate effect, saying it did not want to be associated with it.
"We are totally against all forms of racism and bullying and indeed this behaviour is entirely at odds with (our) brand values," chief executive Charles Dunstone said in a statement.
An unprecedented 30,000 complaints have been received by Channel 4 and the British television regulator about Shetty's treatment at the hands of some of her fellow contestants under 24-hour watch in a specially-built house.
In London Thursday, lawmakers used the furore to demand a review on public financing of Channel 4. Government officials in New Delhi have called on Prime Minister Tony Blair's government to address the matter.
Regulator Ofcom also told Channel 4 to take immediate action Thursday in the wake of Shetty's comments Wednesday that she was a victim of racism after enduring a tirade of foul-mouthed abuse from housemate Jade Goody.
Shetty said Thursday she now believed the abuse was "definitely not" racial discrimination but instead the result of insecurities.
"I stand corrected. I don't want people to think and feel that I felt that way and continue to feel that way... I don't feel there was any racial discimination from Jade's end. I don't think that's true," she said.
As a debate raged about whether Shetty's treatment was racially motivated or not, Channel 4 chief executive Andy Duncan rejected calls for the show to be taken off air.
They "could not say with certainty" that the comments directed at the 31-year-old actress were racist or whether they stemmed from "broader cultural or social differences".
"The debate has been heated, the viewing has at times been uncomfortable but, in my view, it is unquestionably a good thing that the programme has raised these issues and provoked such a debate," he said.
Duncan said the issue would be decided in a viewers' eviction vote Friday between internationally recognised film star Shetty and Goody -- famous for winning the third series of the contest involving the general public.
Channel 4 has been accused of exploiting the controversy for ratings. Audience figures shot up to 5.7 million Wednesday night while shares in Dutch-based production company Endemol reportedly rose as a result.
The row, which dominated media in both countries, sparked a wider debate in Britain Thursday about the extent of racism in society.
Shetty has been branded a "dog", told to clean out the toilet with her teeth and asked whether she lived in a shack; one housemate derided Indian hygiene while another said the actress "wants to be white".
Channel 4 has denied that one of the contestants called Shetty a "Paki" -- a derogative short form of Pakistani.
After Goody's tirade Wednesday, Shetty said: "I'm representing my country. Is this what today's UK is? Scary. It's quite a shame, actually."
Britain's finance minister Gordon Brown -- in India for a trade visit -- described Shetty's treatment as "offensive" and insisted Britain was "a country of fairness and tolerance".
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