The officer was a member of the Pakistani Army, which uses British training facilities.
In Britain, the word "Paki" was originally an abbreviation of the word "Pakistani" but, from the 1960s, came to be a derogatory term for ANY Asians, particularly from the Indian sub-continent (India, Pakistan, Bangladesh).
Prince Harry used the term in a video back in 2006, which has recently fallen into the hands of the News of the World newspaper.
Harry also used the term "raghead", but he may have been referring to the Taliban and Iraqi insurgents in that instance.
Prince Harry seems to take after his grandfather, the Duke of Edinburgh, for his non-politically correct utterances.
In 2002, aged 17, he was thrown out of the Rattlebone Inn pub after calling a French chef "a f****** frog."
'Our little Paki friend': Harry in race row after his 'offensive' remarks are caught on camera
By Daniel Boffey
11th January 2009
Prince Harry has apologised after he was caught on video using the word 'Paki' to describe another Army officer.
In a statement from St James's Palace he said that he had used the term without malice.
However, Tory leader David Cameron has said the Prince's comments were 'completely unacceptable' and added that it was right for him to apologise.
'Light-hearted': But Harry, pictured in Afghanistan, will spark outrage with his comment
But, when Mr Cameron was asked on the BBC's Andrew Marr Show today if the Prince should be punished, he said: 'No he has made an apology, I think it is important he is clear about that and I think that is enough.'
The statement from St James's Palace reads: 'Prince Harry fully understands how offensive this term can be, and is extremely sorry for any offence his words might cause.
'However, on this occasion three years ago, Prince Harry used the term without any malice and as a nickname about a highly popular member of his platoon.
'There is no question that Prince Harry was in any way seeking to insult his friend.
'Prince Harry used the term 'raghead' to mean Taliban or Iraqi insurgent.'
He made the comment in a film shot while he was training to be an officer at the Sandhurst military academy.
One of the soldiers on the course with Harry was an officer from the Pakistan Army, which uses British training facilities.
Storm: On the video Harry introduces this soldier with these words: 'Ah, our little Paki friend.. Ahmed'
Video: The film begins with the Prince behind the camera filming sleeping comrades believed to be waiting for a flight to Cyprus
During the light-hearted film, some of it recorded by the Prince himself on a camcorder, he introduces fellow soldiers by their nicknames – and at one point he refers to one of them, identified as 'Ahmed', as 'our little Paki friend'.
He also told another officer cadet, who was jokingly wearing a camouflage veil, 'Dan the man. F*** me, you look like a raghead' – an offensive term for an Arab.
The statement from Clarence House was part of a major damage-limitation operation, launched after the video emerged.
It added: 'Prince Harry is using the term 'raghead' to mean the Taliban.'
Harry and the other cadets were believed to be on their way to exercises in Cyprus when the footage was recorded in an airport departure lounge.
The Prince filmed the snoozing soldiers awaiting their flight and, as he zoomed in on one Asian cadet, whispered: 'Anybody else around here? . . . Ah, our little Paki friend, Ahmed.'
Offensive: Harry called this solider a 'raghead' as he looked up at the camera
In footage recorded once they arrived in Cyprus, Harry also pokes fun at his grandmother, the Queen, in a spoof telephone call.
Another cadet focuses the camera on the Prince, who he calls 'Mr Wales' and says Harry will 'attempt to deliver a set of deliberate night attack orders in 30 seconds'.
The Prince is then filmed apparently ending the telephone conversation with the Queen, joking 'I've got to go, got to go. Send my love to the corgis.
'Send my love to the corgis and Grandpa' before signing off: 'God save you.'
Laughter can be heard from Army comrades off camera.
High-level talks took place on Saturday between senior Army officers, Ministry of Defence officials and aides at Clarence House and Buckingham Palace to discuss how to deal with the revelations.
Joke call: Harry makes his mock mobile call to his grandmother the Queen
On camera: Harry with a cigarette in his mouth just after he made his mock phone call to the Queen
The Prince, who is training to be a helicopter pilot, is known to be keen to return to Afghanistan where he served with the Army last year against the Taliban.
But the extreme sensitivity of his remark could make it impossible for him to do so.
Khalid Mahmood, Labour MP for Perry Barr in Birmingham, said: 'This might have been said in a light-hearted manner but ultimately it's offensive to a lot of people.
'He needs to understand that this is not acceptable, especially in light of the office that he is going to hold in the Army and as a member of the Royal Family.'
Jeremy Corbyn, the Left-wing Labour MP for Islington, who has called for the abolition of the Monarchy, said: 'At the very least Prince Harry has some explaining to do and there should be an investigation into the substantial question of racism in military establishments.
Harry receives a bottle of champagne at the launch of the Henry van Straubenzee Memorial Fund last week in London
'I think in a multicultural society we have all moved past the idea that there is anything such as a harmless racist joke or remark.
'They are offensive and should not be tolerated by anybody – including members of the Royal Family.
'Nobody at any time should make remarks insulting to anyone's ethnicity. They are offensive, wrong and damaging.'
Former soldier Patrick Mercer, the Tory frontbench spokesman sacked after making his own controversial comments on race in the Army, last night said that Prince Harry's comment would cause 'grave offence'.
'It's terribly unfortunate if this fine young officer has been seen making a mistake like this,' he said.
'It will cause grave offence to any number of soldiers, sailors and airmen and to Pakistanis the world over.'
Mr Mercer was sacked as a Tory homeland security spokesman by David Cameron in
2007 after he said he had met a lot of 'idle and useless' ethnic minority soldiers who used racism as a 'cover'.
Initially a simple abbreviation, the word 'Paki' acquired offensive connotations in the Sixties when it was widely used as a derogatory term to insult immigrants from across the Indian subcontinent.
However, in recent times there has been a trend by second and third-generation British Pakistanis to reclaim the word.
The Army has made a series of attempts to combat racism, including setting up a telephone hotline for servicemen and women from ethnic minorities who are being bullied, and senior Army officers were sent to schools and colleges to persuade would-be recruits from Britain's black and Asian communities they are welcome in the services.
In 1997, the Commission for Racial Equality claimed the MoD had failed to address the problem of racism in the ranks. The Commission had previously accused the Household Cavalry of 'institutional discrimination'.
Asked about the Prince's remarks, an MoD spokesman said: 'Neither the Army nor the Armed Forces tolerates inappropriate behaviour in any shape or form.
'The Army takes all allegations of inappropriate behaviour very seriously and all substantive allegations are investigated.
'We are not aware of any complaint having been made by the individual. Bullying and racism are not endemic in the Armed Forces.'
Drink, drugs and a fancy dress Nazi: the Prince of Controversy
Controversy: Harry dressed up as a Nazi officer for a party four years ago
This is not the first time that 24-year-old Prince Harry has found himself mired in controversy.
Just four years ago the young Prince was forced to make a humiliating apology after pictures emerged of him dressed as a Nazi officer at a
fancy -dress party.
Harry, then 20, was on his gap year before joining Sandhurst to train as a British Army officer when he appeared before 250 fellow guests wearing a shirt and trousers resembling the desert uniform of Rommel's Afrika Korps.
On his shirt collar was a badge of the German Wehrmacht. His left sleeve bore a red armband emblazoned with a swastika.
Publicity surrounding his behaviour was said to have encouraged racist attacks on the Jewish community.
At the time, Clarence House was quick to respond with a fulsome apology – and a promise that the Prince would change his ways.
It was one of a string of incidents to raise doubts over Harry's character and the group he was associating with.
In 2002, the Prince, then 17, was sent to a drugs rehab clinic for a day after he admitted to his father that he had smoked cannabis in the grounds of his Highgrove home, and drunk heavily at the nearby Rattlebone Inn.
Playboy prince: Harry leaving regular haunt Mahiki nightclub with Chelsy Davy
Harry had reportedly been thrown out of the same pub for insulting a French chef and calling him a 'f****** frog'.
Repeated incidents of Harry rolling drunk out of West End nightclubs and even becoming involved in a tussle with a photographer added to the image
of a playboy Prince out of control.
Even his involvement with the Rugby World Cup Final in 2003 was tarnished. He reportedly went on a 23-hour 'bender' to celebrate England's win.
But it was a familiar routine. Harry is a regular at Boujis nightclub, where Krug champagne and Grey Goose vodka are said to be his favourites.
But a new low came in another London club where he threatened to kill a fellow clubber who made a remark to his girlfriend Chelsy Davy.
Out: The beaming Prince with colleagues at Sandhurst in 2006 after completing officer training
Friends justified his excesses by explaining that Harry was frustrated that, as a second lieutenant in the Household Cavalry Blues and Royals, he would never see active service because of fears for his safety.
But even after his ten-week tour in Afghanistan early last year, and a promotion to lieutenant in April, doubts have been left over whether the Prince has grown up.
In September, Harry reportedly spent £5,000 on a night at Boujis, where he drank 'Crackberry cocktails'.
.and I'm a Limey
and my mate from Edinburgh is a Jock,
and my cousin from cardiff is a Taffy
and my friends from Canada are Canucks
and my dad was a Yank
get over it......
- Roge Wheeler, Mexico
In what way could the term possibly be misconstrued as having racist undertones? It is simply an abbreviation for Pakistan!
- Roderick Carpenter, Withington, Manchester, UK
I'm a Taffy, so what.!
- William Owen, Cardiff, Wales
Here we go.
He's a SOLDIER. Soldiers have BANTER.
Leave him alone - he's got more balls than just about anyone!!!
- Tony the Trader, Canary Wharf
There is so much noise about racism in this country.
Here is who I think is a fine young soldier man who loves his profession.
Over time he has genuinely demonstrated his commitment to help others in need.
He may have said the so called 'forbidden word' but who knows under what circumstance.
- McAden, Essex
If someone calls me a Brit, short for British,can I make a big stink about racism? Its gone too far, leave the lad alone.
- Janet S, Sale, Cheshire
It is simply an abreviation of Pakistan. I was born in Britain and do not take offence at being called a Brit!
- Malcolm Burn, Newcastle