Channel 4 has been rapped by media watchdog Ofcom after broadcasting the word "retard" on its show Big Brother Big Mouth.
Ofcom received eight complaints about the word's use in an exchange between Celebrity Big Brother contestant Vinnie Jones and presenter Davina McCall.
The watchdog initially found the show not to be in breach of its guidelines.
But when two complainants requested a review of the decision, the programme was found to be in breach.
"We are delighted that Ofcom has changed its mind on this matter," said Mark Goldring, chief executive of the learning disability charity, Mencap.
Nicky Clark, a mother of two disabled children and disability campaigner who complained to Ofcom, told the BBC she fully agreed with the ruling being overturned.
"This is not a call for censorship or to block free speech," she said. "It is simply a call for the matter to be dealt with fairly and for the views of disabled people and those of us who love them to be listened to. The word must be judged by the context, and in this case it was derogatory."
The "retard" comment followed a question from a member of the studio audience on Big Brother's sister programme, broadcast on 29 January at 2305 GMT.
Jones was asked how he knew that the person who came into the Big Brother house disguised as a chicken was McCall and not fellow housemate, Nicola Tappenden.
In response, he said: "She was walking like a retard, she was walking like this (he then demonstrated walking with difficulty) and our Nicky walks lovely."
McCall replied: "I do not walk like a retard."
In line with Ofcom's procedures, the complaints were initially considered by Ofcom without representations being requested from Channel 4.
The complaints were not upheld as "there was not sufficient evidence to conclude that the word was necessarily intended to be offensive to anyone with learning difficulties".
However, guidance was given to Channel 4 for future reference.
Two of the complainants requested a review of the decision - the case was then referred to Ofcom's Broadcasting Review committee.
Channel 4 had to submit a written response - the TV channel said the programme had "an established reputation for its irreverent humour and outspoken content" but acknowledged the comments could have caused offence to some viewers.
"The comment was not used with the intention of offending anyone with learning difficulties," it said.
However, the commissioning team regretted that "in the heat of the moment during a live programme" the comment by Mr Jones was allowed to go unchecked.
In response to a complaint direct to Channel 4, it had apologised and removed the comments from its video on demand service.
Ofcom's committee found the comments made by Jones and McCall were "clearly capable of causing offence".
It said it was particularly concerned that not only was Jones's comment not corrected but that it was repeated by McCall.
The committee was also concerned that the programme-makers took no action to try to mitigate what was said.
It found the broadcast to be in breach of rule 2.3 - which requires material that may cause offensive to be justified by the context.
Given Channel 4's immediate response to the complaints, the committee said the matter was now resolved.
Learning disability charity Mencap welcomed the ruling, saying over 750 of its supporters wrote in protest to Ofcom after it originally did not uphold the complaints.
Mencap chief executive Mark Goldring said: "We are delighted that that Ofcom has changed its mind on this matter.
"The groundswell of protest and emotion caused by Channel 4's broadcasting of this insulting word has demonstrated just how offensive and degrading a term it is.
"Ofcom has done the right thing in taking this opportunity to set a standard and make Channel 4 take responsibility for its mistake."