The Professional Footballers' Association has become embroiled in a fresh racism row after its chairman, Clarke Carlisle, admitted it was a "huge mistake" to hire the comedian Reginald D Hunter for the union's annual awards ceremony on Sunday night.

Hunter, a black American comedian renowned for racial humour, used the word "nigger" during his set at the Grosvenor House hotel in London, following two years in which high-profile incidents including the John Terry-Anton Ferdinand case and Luis Suárez's abuse of Patrice Evra have blighted the game.

The anti-racism campaign group Kick It Out also condemned the PFA's choice of entertainment and Carlisle, who has been chairman since 2010, admitted he was "embarrassed" while watching Hunter perform. "I thought we made a huge mistake," said the Northampton Town defender. "I thought with everything that we have gone through over the last few years, using a comedian of his type was a bad error in judgment. I was embarrassed sat up there throughout and I want to apologise unreservedly to the footballing community that was present.

"What galls me is that it was a momentous occasion. It was our 40th award, Kim Little won the first women's award, a place in history. It was the first time that the men's and women's game had unified and instead we are talking about someone who we paid to come in as entertainment and be facetious about something we stand vehemently against so I apologise for that. I was embarrassed.

"I'm not lambasting Reginald D Hunter. That's his act, it's what he does. When you go to a comedy store you know you might have to leave your moral compass at the door, but the PFA awards dinner, the showpiece of our season, is not the time to have an act like that."

A Kick It Out statement read: "It is a matter for the PFA … Kick It Out condemns racial slurs, the use of the n-word irrespective of context, and will act on any complaints made to the organisation on it."

However, the PFA chief executive, Gordon Taylor, defended the choice of comedian. Asked if it was a mistake to hire Hunter, he said: "No, no, don't be silly. Are you serious? I think there were a few raised eyebrows over the comedian but that is the sort of thing you can't control. It was unfortunate. He is a professional comedian. It's a difficult subject in football and with him not being fully aware of how emotive it has been in football, that was probably a difficulty for him."

The former Football Association ambassador Paul Elliott resigned in February after allegedly using a racially derogative term during a row with the former Charlton Athletic player Richard Rufus. At the time, the FA chairman, David Bernstein, said: "The use of discriminatory language is unacceptable, regardless of context."

Suárez, whose name was booed at the PFA ceremony after his recent FA 10-match suspension for biting Branislav Ivanovic, was banned for eight matches in December 2011 after being found guilty of racially abusing Evra.

Terry was banned for four matches in September last year for racially abusing Ferdinand, although he was cleared of the same offensive at Westminster magistrates' court.