Update 5pm, with Daily Mail statement: Robert Peston, the BBC's business editor, outlined his discomforting experiences at the hands of the Daily Mail in a speech at City University London last night.

He told how the paper published a story about him and his wife, the late Sian Busby, that "went beyond what I regarded as acceptable." He then read you the opening lines of the article published in the Mail in January 2008:

"A champagne party at the Royal Academy provided a glamorous backdrop for BBC business editor Robert Peston and his writer and film-maker wife Sian Busby to celebrate her receiving the all-clear from lung cancer. After a gruelling year battling the illness during which she had to have part of a lung removed mother-of-two Sian… was in high spirits."

Peston, giving the James Cameron memorial lecture, said there were several things wrong with the piece:

"One was that it was less than six months since Sian was diagnosed with non-smoking lung cancer. The other was that Sian had not received the so-called 'all clear' and – tragically – never would. But actually those characteristic factual errors were not what upset us. What knocked us over was that we had gone out of our way to keep out of the public domain that Sian was suffering from such a serious cancer, because we wanted our children to have as normal and untroubled a life as possible, and in particular we didn't want our youngest boy – who was still at primary school – to be badgered by kids in the playground about his mum who had cancer. So, for both of us, the really maddening thing about that piece was that the Mail ran the story without bothering to give us any advance warning or to check whether it was appropriate. As it happens, Sian was a Daily Mail reader – in part because (curses) she liked the way it was so rude about people like me, but mostly because of the daily Scrabble puzzle – and the first we knew of this story was when she opened the paper at breakfast. There was no public interest justification for the disclosure of Sian's serious illness. It had no bearing on whether I was fit and proper to be in a licence-fee funded job. So surely it would have been reasonable to ask if we wanted this very private element of our lives shouted to the world. My instinct was to complain to the Mail and its editors. Sian asked me not to, because she was frail and did not want the added stress of seeing me go to war with a powerful newspaper. So the Mail got away with it. As it often does."

Sian Busby went on to die from lung cancer in September 2012, aged 51. But, despite that story, Peston said his wife "never dumped the bleedin' Daily Mail."

Peston, no fan of the Press Complaints Commission, said: "Some way has to be found to force improved standards of common decency on newspapers… there must be a cheap, easy, independent and reliable arbitration process to force speedy prominent corrections on newspapers, and deliver ample compensation in a timely fashion to those who have been traduced."

But he did not favour the royal charter option to provide a new form of press regulation. State under-pinned regulation "would make all us poorer – and less free – in the long run," he said.

"The press's best argument for seeing off regulation by royal charter would be behavioural. I don't mean by that merely that newspapers should take more care before vilifying and pillorying individuals who may or may not deserve it, or before invading precious privacy without good cause. What I mostly mean is that if they are going to defend their right to investigate free of state-empowered scrutiny, they have to do more proper investigating that's plainly in the public interest rather than just of interest to the public."

He was heartened by the Mail on Sunday's exposure of the the Co-op bank chairman, the Rev Paul Flowers, because it "shone a light on how an important institution… had been chronically mismanaged to the brink of disaster."

But such stories have been the exception, he said, calling on papers "to shine the brightest light on the institutions of the state, and on the powerful in general… by exposing actual rot and not just hypocrisy and double standards."

Before Peston's lecture, the BBC's chief international correspondent, Lyse Doucet, received the 2013 James Cameron memorial award in recognition of her contribution to journalism.

Doucet, who has been reporting for the BBC for nearly 30 years, paid tribute to Cameron, asking the audience to remember "his great integrity, great wit and compassion' and described how he 'defended in loud voices those who were voiceless."

Update 5pm: A spokesman for the Daily Mail said: "We very much regret the distress clearly caused by our 2008 diary piece, but it is important to understand the background.

"This was a positive and upbeat three-paragraph item published after our reporter was introduced, as a Mail diary journalist, to Mrs Peston by a well-known freelance celebrity press photographer – who is also the late Mrs Peston's cousin - at a book launch in January 2008.

"The reporter had a friendly conversation with Mrs Peston during which she volunteered information about her forthcoming book and her illness, which he quoted in his story. She also posed for a picture with her husband, which we published alongside the story. No complaint was made to the Daily Mail at the time or since.

"We are sorry to learn some six years later that the story was not accurate and offer our sincere apologies."