Former BBC director-general Tony Hall has said Martin Bashir would not have been rehired by the broadcaster if the manner in which he secured his Panorama interview with Britain's Princess of Wales had been known about at the time.
Mr Bashir was allowed to return to the BBC in 2016 as religious affairs correspondent and subsequently became religion editor in 2018.
Appearing before the Digital, Culture, Media and Sport Committee, Mr Hall said he had not wanted to second-guess those in charge of the hiring process.
Committee chairman Julian Knight said it was "utterly extraordinary" that the BBC would rehire Mr Bashir and asked how it came to be that a "known liar" was brought back to the corporation.
Mr Hall said: "If we knew than what we know now, of course he wouldn't have been rehired."
Tory MP Mr Knight responded: "A cynic would suggest the process was entirely concocted so that the resolution at the end of the day was that Mr Bashir would get this job."
A recent report by former judge John Dyson criticised the methods the journalist used to secure his bombshell interview in 1995, including using fake bank statements.
The report also suggested the BBC had failed to uphold "governance, accountability and scrutiny" with its internal investigation, carried out by Mr Hall in 1996 when he was the managing director of news and current affairs and Mr Birt was director-general.
Mr Hall, who was director-general of the BBC from April 2013 to August 2020, started the session by acknowledging "how hard this has been for the royal family, for the two princes, and I'm sorry for the hurt caused".
He added: "At core here, I trusted a journalist, I gave him a second chance, and that trust was abused and was misplaced.
"I don't think the words 'honest and honourable', 25 years on, look appropriate at all."
Reflecting on the decision to "blackball" graphic designer Matt Wiessler, who was sidelined by the corporation after he blew the whistle on Mr Bashir's use of fake documents, Mr Hall said: "I regret the language that we used about Mr Wiessler and I think we could have managed it better.
Another former BBC director-general John Birt will also be questioned by MPs about events leading up to the Panorama interview.
Current BBC director-general Tim Davie and chairman Richard Sharp will also appear before the the committee to give evidence on the implications of Mr Dyson's conclusions.
In his report, Mr Dyson said Mr Bashir used "deceitful conduct" to obtain the 1995 interview with the Princess of Wales, which was then covered up by a "woefully ineffective" internal investigation.
A review into the decision to appoint Mr Bashir as religious affairs correspondent at the BBC following the interview found "no evidence" the journalist was given the job to "contain and/or cover" up the events surrounding the programme.
The review, conducted by Ken MacQuarrie, found Mr Hall did not play a part in the decision to rehire Mr Bashir.