The BBC will not appeal against a High Court decision to award Sir Cliff Richard damages over coverage of a police raid on his home.
Sir Cliff sued the corporation for broadcasting a South Yorkshire Police raid on his home in Sunningdale, Berkshire, in August 2014, and earlier this year was awarded £210,000 damages in a landmark privacy case.
He was also awarded an additional £850,000 in costs.
Lawyers for the broadcaster had said the case would create "a severe chilling effect" on press freedoms, but it has decided not to appeal.
BBC director general Tony Hall said: "The BBC is already on record in saying that we are sorry for the distress that Sir Cliff has been through. We say so again today. We fully appreciate the impact this has had on him.
"There are lessons for the BBC in how we reported this story and we will think very carefully about our approach in the future – both in tone and style.
"We recognise there are things we got wrong – even if all the facts we reported were right."
But his statement reasserted the view that the case would represent a "dramatic shift against press freedom", and that it would create "huge uncertainty over what might qualify as being in the public interest".
He added that the ruling would "make it harder to scrutinise the conduct of the police" and "undermine the principle of the public's right to know".
Mr Hall said the decision not to appeal was taken following legal advice, with any further proceedings only serving to "prolong Sir Cliff's distress".
0:24"Instead the BBC is writing today to ask the Government to consider a review of the law in this important area to protect the right to properly and fairly report criminal investigations, and to name the person under investigation," he added.
"There is a fundamental principle of press freedom at stake here and one upon which we believe parliament, as our lawmakers, should decide."
Last month it was reported that Sir Cliff – who said he was left in "creative limbo" for two years following the raid – was understood to no longer be seeking indemnity (such as loss of earnings) from the BBC.
The star has previously said the case cost him £3.4m.
His spokesman said: "Sir Cliff reluctantly took his case to court because he felt his privacy had been flagrantly invaded and disappointingly the BBC were not prepared to acknowledge that and apologise.
"He welcomes the fact the BBC have decided not to seek permission to appeal from the Court of Appeal, particularly after the judge gave his judgement that they had no grounds on which to pursue such an action.
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"Sir Cliff now hopes that outstanding issues can be resolved quickly."
South Yorkshire Police previously settled a damages claim with Sir Cliff out of court, agreeing to pay him £400,000.
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