The ABC has issued a grovelling apology to former prime minister Kevin Rudd in a bid to fend off legal action, admitting its much-hyped "Cabinet Files" coverage was botched amid a growing number of "editorial mistakes" by the national broadcaster.

In a letter to Mr Rudd obtained by Fairfax Media, ABC managing director Michelle Guthrie "unreservedly apologised" to Mr Rudd over a much-publicised January report that claimed the Labor prime minister was warned of "critical risks" relating to the home insulation scheme. Four men lost their lives installing home insulation under the controversial economic stimulus program.

Former prime minister Kevin Rudd and ABC managing director Michelle Guthrie. Credit:Alex Ellinghausen

However the story implied the former prime minister ignored critical safety concerns when the document actually referred to financial risks associated with the scheme. It also emerged the cabinet paper had already been made public and was not a new document, as the ABC suggested.

A furious Mr Rudd - who was cleared of any wrongdoing at the royal commission - launched legal proceedings, and the ABC quickly rewrote the story and said it never intended to "suggest that Mr Rudd recklessly ignored critical risks before the deaths of four young installers" or "that he lied to the royal commission that examined those deaths".