The president of the US public broadcaster National Public Radio (NPR) has resigned following the release of a "sting" video in which one of its fundraising executives criticises the Republican party and refers to Tea Party supporters as "seriously racist, racist people".

Vivian Schiller, who was also chief executive of NPR, stepped down as the row over the video intensified.

She described the executive's comments as "an affront to NPR as a news organisation", adding: "Those comments were really contrary to what we stand for, everything we do."

The video, which was choreographed by the Republican activist James O'Keefe, shows NPR executive Ronald Schiller (no relation to Vivian) meeting a group of people posing as Muslim philanthropists.

In it Ronald Schiller tells the people – ostensibly potential donors from the "Muslim Education Action Centre Trust" – that the Republicans have been "hijacked" by the Tea Party movement, whom he describes as "xenophobic, I mean basically they are; they believe in sort of white, middle America gun-toting. I mean, it's scary. They're seriously racist, racist people."

Ronald Schiller also claimed that NPR "would be better off in the long run without federal funding".

After the video appeared online on Tuesday, Ronald Schiller said: "While the meeting I participated in turned out to be a ruse, I made statements during the course of the meeting that are counter to NPR's values and also not reflective of my own beliefs. I offer my sincere apology to those I offended."

The fundraising executive, who stressed in the video that he was speaking "personally as opposed to wearing my NPR hat", had been due to leave NPR to take up another job. His departure has been made "effective immediately".

Vivian Schiller, however, was forced to fall on her sword. In a statement, the chairman of the board said: "It is with deep regret that I tell you that the NPR board of directors has accepted the resignation of Vivian Schiller as president and CEO of NPR, effective immediately. The board accepted her resignation with understanding, genuine regret and great respect for her leadership of NPR these past two years."

The board said she had brought "energy and vision" to the organisation. "She was passionately committed to NPR's mission and to stations and NPR working collaboratively as a local-national news network."

Vivian Schiller's resignation follows not only her namesake's gaffe but the dismissal last year of its political analyst, Juan Williams, for saying on the Fox News Channel that he felt nervous when he saw Muslims in traditional dress boarding planes.

Critics of NPR have repeatedly accused it of having a liberal slant and questioned whether it should continue receiving federal money.