Deputy director general Mark Byford has ordered a report into the incident, in which a man calling himself Jude Finisterre claimed Dow Chemical had accepted responsibility for the Bhopal disaster and decided to "liquidate" its Union Carbide subsidiary to pay compensation to the victims of the tragedy.

The BBC said it had apologised to the company over the incident, which it described as an "an elaborate deception", and that lessons would be learned from the embarrassing affair.

"This interview was inaccurate, part of an elaborate deception. The person did not represent the company and we want to make clear that the information he gave was entirely inaccurate.

"The BBC also immediately contacted Dow Chemicals and apologised to them. The BBC is looking into the incident to establish the background and how the interview got to air," it said in a statement.

A source at the corporation said the reporter responsible had logged onto the company's website to verify Jude Finisterre's identity and had found a reference to him with a contact number on the media contacts page.

When the reporter called the number, a man calling himself Jude Finisterre answered and said he would be prepared to travel to London to be interviewed if necessary. The interview eventually took place in the BBC's Paris studio.

"This was a really polished stunt. I don't know whether the website was a mirror copy or if the real site was hacked into somehow but it looked completely genuine. At the end of the day it's a really sick thing to do," said the source.

The hoax was only discovered when journalists in the BBC newsroom smelled a rat and called Dow Chemical.

The story was extensively covered on the BBC, which broadcast the interview in full on its international channel, BBC World, and followed up the story on News 24 and BBC Radio 4's 10am news bulletin.

The hoaxer said Dow Chemical was "accepting full responsibility for the Bhopal catastrophe" and had put in place a $12bn plan to compensate the victims of the disaster.

The hoaxer, whose real name is Andy Bichlbaum, appeared on Channel 4 News today and described himself as an anti-corporate protestor.

He said he had set up a fake Dow Chemical web site to satirise the company.