Caroline Burstein, the founder of leading cosmetics company Molton Brown, has provoked anger after using the word “coloured” to describe black people.

Ms Burstein said she believed the fashion industry was an inclusive and diverse place where many “coloured” people worked.

She made the remark in front of 220 people at the launch of a Jewish educational project, where she was sitting on a panel alongside controversial fashion designer John Galliano.

When a black member of the audience confronted her, Mrs Burstein said it was acceptable to use the word because: ”I’m from the ‘50s”.

She said: “It is what we say, I don’t mean to cause offence. You're taking it out of context."

She added: "I don't regrett saying it, I’m not apologising for using the word.”

The audience member, who wished to remain anonymous, told Ms Burnstein: “On a stage you really shouldn’t say ‘coloured’. You need to take more responsibility and it is not ok.

“Maybe you should not speak publicly about experiences that don’t affect you. I don’t want to be aggressive, I just want you to know it is offensive.”

The audience member said that she was furious at Mrs Burnstein’s comments.

She said: “It’s humiliating. I can’t believe she said that.”

Ms Burnstein was speaking on Thursday night at an event marking the launch of Connect, an educational partnership between three Orthodox synagogues – Central, Western Marble Arch and New West End.

She founded Molton Brown in the 1970s with her then husband, hairdresser Michael Collis, but sold up in 1993. The company was sold again in 2005 for a reported £170 million. She has had no involvement with the brand for over 22 years.

Until recently Ms Burstein was the creative director of thriving London fashion retailer Browns, which was started by her parents.

At last night’s event, Mr Galliano, who was convicted by a French court after making antisemitic remarks in a drunken rant in 2010, told the audience that he had learned to take responsibility for his actions.

He said: "I am an alcoholic. I am an addict we addicts are not responsible for our disease. But that is by no means an excuse.

"I do take complete responsibility for my recovery and making amends.I get a daily reprieve from this disease and that comes from total abstinence.

“I used to blame everyone for what happened, but now I bear no resentment. I have finally come to terms with what happened and what was my part in it.”