Under the headline "India Protests, Slur on Sheila, Kiwis Sorry", it was revealed diplomatic fallout had gone beyond India yesterday summoning New Zealand High Commissioner Rupert Holborow.
The India Government told Mr Holborow it was annoyed at comments made by Henry about Delhi Chief Minister Sheila Dikshit, whose name he mispronounced and made fun of.
Mr Holborow was handed a demarche, a formal protest.
The Hindustan Times reported that senior external affairs ministry official Vijaya Latha Reddy last week "consciously" stayed away from a lunch in honour of Governor-General Sir Anand Satyanand in reaction to Henry's comments.
Sir Anand has himself been the victim of Henry's barbs. He asked Prime Minister John Key if Sir Anand was "even a New Zealander" and whether the next governor-general would "look and sound like a New Zealander".
Sir Anand is in Delhi for the Games, and addressed the New Zealand team on the eve of the opening ceremony.
The Hindustan Times described the tiff as a "major diplomatic rift".
Ms Dikshit has been hailed as the saviour of the Delhi Games, stepping in when chefs de mission refused to bring their athletes to India unless accommodation was brought up to standard.
Mr Holborow was told that India "strongly and unequivocally denounces the racist remarks of the journalist in question. These remarks are totally unacceptable to India".
He later released a statement saying "I would like to convey my deep regret for the hurt these comments have caused".
He called them "culturally insensitive, inappropriate and vulgar".
"They reflect the views of only one media commentator (who has already been censored for other racist and unacceptable comments), and certainly not the New Zealand Government or people," he said.
Any offence caused by Henry to Indians had yet to impact on New Zealand's Commonwealth Games athletes, who had not heard any criticism from local people, a team spokeswoman said.
Nor was she aware of any athlete being outraged by what Henry had said, as they were concentrating on their events, and had not commented to her on the comments, she said.
But Ms Dikshit was popular with the New Zealand team.
"The team regards the chief minister of Delhi very highly, she was the saviour of the Games," the spokeswoman said.
Mr Holborow said New Zealand and India had "warm and positive links".
"There is never a case for making remarks of this nature which are hurtful."
Foreign Minister Murray McCully said today Henry's comments were "gratuitous and insulting".
NZPA understands a letter was to be sent today by Mr McCully to his Indian counterpart over the issue and would include the fact the comments were from an individual and not representative of the country.
A spokesman from Broadcasting Minister Jonathan Coleman's office said any further sanctions of Henry were up to TVNZ and it was not his business to get involved in such disputes.
He said the Television New Zealand Act clearly stated that shareholding ministers were not to give direction in respect of allegations or complaints involving employees.
Henry has been suspended without pay for two weeks.
