Celebrity Big Brother housemates Jade Goody and Danielle Lloyd both apologised to Bollywood star Shilpa Shetty in a belated attempt at reconciliation.
Their words last night came as their careers appeared to be crumbling as a result of their alleged racism, while Channel 4 remained defiant about the show.
Complaints from viewers about the race row soared to more than 36,000, as Big Brother's sponsor Carphone Warehouse suspended its affiliation with the show.
Culture Secretary Tessa Jowell joined the fray, branding last night's show "disgusting" and "racism being presented as entertainment".
Channel 4's chief executive had refused to comment on the furore, which turned into a major international incident.
When he finally did answer questions, Andy Duncan said he was "not ashamed of what was broadcast, quite the opposite".
He said the programme, which last night had 5.2 million viewers - its third highest audience this series - "has touched a real nerve".
Mr Duncan said: "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.
"These attitudes, however distasteful, do persist - we need to confront that truth."
Former Miss Great Britain Lloyd has been dumped from a lucrative modelling contract, believed to be worth six figures, as a result of the row.
The girlfriend of Teddy Sheringham signed a 12-month deal at the end of last year to be the face of motorcycle insurance firm Bennetts.
The Perfume Shop also decided to withdraw Goody's best-selling perfume, Shh..., from its shelves because of the controversy, adding that it would review the position when Goody left the house.
Yesterday evening Shetty and Goody had a heart to heart, initiated by the London-born reality TV star.
Goody said: "I know that what has happened has not been nice for you... and a lot of stuff got said the other day from you and from myself.
"I didn't say it in a racial way... I do not judge people by the colour of their skin."
Shetty replied: "I know that, I don't think you're racist.
"I really appreciate that you took the first step."
The pair then hugged and made up after giggling over how trivial the argument was.
As the housemates went to bed it was Lloyd's turn to apologise, crouching beside her bed to claim she was "disgusted" by her behaviour.
She told Shetty: "I didn't agree with some of the things you said to Jade, but I especially didn't agree with some of the things that Jade said to you.
"I'm sorry. 'Cos I'm young and quite naive, I've probably took the route where I'll stick with Jade.
"I feel really disgusted at myself... I'm following the leader, following the group - when .125you are.375 a really nice girl."
Lloyd then admitted she felt intimidated by Goody
Shetty appeared to accept Lloyd's apology, saying: "Give me a hug."
On Wednesday Shetty had told Big Brother in the diary room that she did not believe her row with Goody had been racially motivated.
Speaking on BBC1's Question Time last night, former Tory minister Edwina Currie condemned the way Shetty was attacked by other women on the show.
"They are crude young women having a go at another young woman in the most horrendous fashion," she told BBC1's Question Time.
"She is a beautiful young lady and they are slags."
The row is likely to come to a head in tonight's eviction, when Goody, the former darling of reality TV, is likely to be booted out.
As their careers began to nosedive, representatives for Goody and Lloyd released statements saying their clients were not racist.
Carphone Warehouse ordered Channel 4 to remove its name and branding from the programme with immediate effect, following the escalation of alleged racist bullying directed at Shetty.
The company's chief executive Charles Dunstone said yesterday: "Our concern has rapidly mounted about the broadcast behaviour of individuals within the Big Brother house.
"We had already made it clear to Channel 4 that were this to continue, we would have to consider our position.
"Nothing we saw last night gave us any comfort. Accordingly, we have instructed Channel 4 to remove our sponsorship name and branding with immediate effect."
Hertfordshire Police have launched an investigation into the allegations of racism.
Ofcom chief executive Ed Richards said he would write to Channel 4 about the show.
The programme was being monitored, he told the Oxford Media Convention, and if the organisation decided to take any action it would do so "under due process".
Commons Leader Jack Straw has encouraged the media watchdog to launch an immediate investigation.