The Sherlock star had been speaking about diversity in Hollywood when he used the term, and he was immediately inundated with criticism about the out of date remark.
He made the comment while saying he believes Hollywood has more opportunities for black actors than the UK.
Benedict later issued an apology, saying he was "devastated" to have caused any offence and branding himself an "idiot" for using the terminology.
His full statement read:
"I'm devastated to have caused offence by using this outmoded terminology. I offer my sincere apologies. I make no excuse for my being an idiot and know the damage is done.
"I can only hope this incident will highlight the need for correct usage of terminology that is accurate and inoffensive. The most shaming aspect of this for me is that I was talking about racial inequality in the performing arts in the UK and the need for rapid improvements in our industry when I used the term.
"I feel the complete fool I am and and while I am sorry to have offended people and to learn from my mistakes in such a public manner, please be assured I have. I apologise again to anyone who I offended for this thoughtless use of inappropriate language about an issue which affects friends of mine and which I care about deeply."
Anti-racism charity, Show Racism The Red Card, said Benedict's message was sincere but had been phrased in the wrong way.
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