Paul Henry's racist comments finally caught up with him yesterday when he resigned from TVNZ after meeting the state broadcaster's chief executive.

Pressure has been mounting since Henry insulted the Governor-General, Sir Anand Satyanand, last Monday, which caused a diplomatic row.

The insult followed previous derogatory comments he made about an Indian minister.

Henry, who won the Peoples' Choice award at the Qantas Television Awards three weeks ago, expressed shock about the impact of his actions and sadness that they had led to his resignation.

"I am astonished and dismayed that my comments have created a diplomatic incident. My style is conversational and of course unscripted.

"I walk the finest of lines and accept that I have inadvertently crossed it from time to time. But I recognise the realities of the situation."

Speculation was rife last night that TVNZ had agreed to pay six months' salary to Henry, believed to be about $150,000.

TVNZ spokeswoman Megan Richards said any financial settlement was a private matter for Henry. She said "neither his salary or any financial sorting out is taxpayer dollars".

Prime Minister John Key, who was to appear on his usual Breakfast slot today minus Henry, said "this episode has been sad and regrettable".

"Mr Henry's resignation brings closure to the matter and we should now put it behind us," he said, through a spokeswoman.

A spokesman for the Governor-General said he was aware of the resignation but no comment would be made at this time.

TVNZ's chief executive, Rick Ellis, said he commended Henry for his decision following the "inappropriate" comments which he said had damaged New Zealand's international relationships.

"As an organisation committed to the principles of free speech it is our job to steer a course between the sometimes conflicting demands of freedom of opinion and respect for others.

"This is not always easy. However, what is clear as an outcome of this episode is that any suggestion of racism, whether intended or not, is unacceptable. We are quite clear about that."

Mr Ellis said that as a result of Henry's comments, reviews were under way into the company's editorial policies and presenter code of conduct, particularly in live broadcasts.

"I very much hope that Paul's resignation will demonstrate his profound regret and offer an opportunity for healing."

Mr Ellis said that thousands of supporters had contacted TVNZ andhe knew that they would be disappointed with the outcome.

"Paul is not the first broadcaster to step over the line, and I expect he won't be the last - but there are factors at play here that have taken things to a unique level.

"I have a stack of emails on my desk fully 20cm high. To those people, I would ask you to consider the consequences to Paul and to the country of continuing a situation that has generated a divisive debate and continuing hurt for others."

Media commentator Jim Tully, of Canterbury University, did not believe Henry had stepped aside of his own accord.

"I'm sure that Rick Ellis has finally accepted that their immediate reaction was dreadful ... to many, and now they had to go beyond that because [of] political fallout," he said. "I'm sure there was a lot of pressure behind the scenes."

But it was a "a reasonably dignified exit", Mr Tully said. "In the sense that he's resigned rather than being seen to have been sacked ... clearly TVNZ had reached the point they thought he was now a liability."

Mr Tully said Henry could still have a career in radio or a more entertainment-based TV programme.

Maori Party co-leader Dr Pita Sharples said the outcome was honourable.

"Paul clearly recognises his behaviour has been unacceptable and this is an honourable outcome that will enable him to consider a new approach to public commentary."

Asked if he was surprised at the response to the controversy, Mr Key said: "Not entirely. These things sometimes can get a bit of a life of their own. This one certainly has."

Mr Key said he had spoken personally to Sir Anand about the Henry saga.

"I don't think he's feeling particularly angry or bitter, but I think he'd rather not be embroiled in this sort of situation."

Asked what impact these incidents have on international relations, Mr Key said it was important not to overstate them.

"The High Commissioner issued an apology [to India] on behalf of the Government if there was any offence taken in Delhi on Thursday.

"But people also recognise at a Government level that there are broadcasters and commentators and comedians who say things all over the world and if every time you took offence from those we ceased having diplomatic relations then we'd be in a very sad state in the world."

Mr Key said he did not think New Zealand was a racist country.

Commentator Willie Jackson said sacking the country's "best" broadcaster would not fix the rot at TVNZ.

He said that when Henry was on song there was nobody better. The shamed broadcaster was a victim of "TVNZ's culture" which never held him accountable and whose new bosses never set clear parameters.

Labour Party leader Phil Goff was one of the first to criticise Henry's remarks as racist but said last night the broadcaster had done the right thing.

The end of an error
* Fri Oct 1: Henry erupts into giggles on Breakfast, mispronouncing Delhi chief minister Sheila Dikshit's name. It's supposed to be "Dixit".

* Mon Oct 4: Henry asks Prime Minister John Key if New Zealand will have Governor-General who looks and sounds "more like a New Zealander" next time. He later issues an apology. TVNZ spin doctor Andi Brotherston makes knee-jerk comment to media that Henry was prepared to say things "we quietly think but are scared to say out loud".

* Tues Oct 5: Henry is stood down on a two-week suspension. There is a protest outside TVNZ's offices, calling for Henry to resign.

* Wed Oct 6: Brotherston sends email to staff apologising for "horrendous error of judgment" in not seeking a second opinion "or even paus[ing] for breath" and says she has offered her resignation.

* Thurs Oct 7: New Zealand High Commissioner Rupert Holborow called in by the Indian foreign ministry in New Delhi and handed a formal protest over "Dikshit" remarks - Indian Government lodges a formal complaint.

* Sun Oct 10: Henry offers his resignation to TVNZ chief executive Rick Ellis, who accepts it.

Paul Henry's statement:

"I have resigned from TVNZ, effective immediately.

It is no longer practical in the current environment for me to do the job I was employed to do, and have so enjoyed doing. It is also difficult for TVNZ to get on with the business of being a first class broadcaster as long as I remain.

I have apologised twice, and have meant every word. I again apologise to all those who were genuinely hurt by what I said.

However, it is clear that things have now reached a point where my actions will have to speak louder than my words.

I am astonished and dismayed that my comments have created a diplomatic incident. My style is conversational and of course unscripted. I walk the finest of lines and accept that I have inadvertently crossed it from time to time.

But I recognise the realities of the situation.

I do not want to continue to be used as a lightning rod for racial disharmony in this country. Likewise, I certainly do not want to have my elderly mother staked out at her nursing home by tabloid media, as has happened this weekend.

I will miss the professionalism and friendship of the brilliant production team I have worked with, and I will miss the fun and satisfaction of having doubled the audience for Breakfast in the last few years. The programme is great - and I'm sure its success will continue.

To be honest, most of all I'll miss Pippa.

I am grateful to the many thousands of people who have offered their support to me. I hope they will understand and accept that an extraordinary convergence of circumstances has made this action necessary.

I am saddened by this whole episode - sad that I crossed the line in the first place, and sad that an employer I have always served with pride has had to suffer slings and arrows.

To all those who have enjoyed Breakfast - thank you. It has been a privilege to have been part of your mornings for the last seven years."