A Metropolitan Police constable has admitted in court to calling a suspect a "n*****" but claimed it was not intended as racial abuse.
In an exchange recorded on a mobile phone, Pc Alex MacFarlane, 53, told 21-year-old Mauro Demetrio: "The problem with you is you will always be a n*****'."
He also said: "Be proud of who you are, don't hide behind your black skin."
The conversation took place after Demetrio had been arrested on suspicion of drink or drug-driving and was taken to Forest Gate police station, east London, on 11 August last year.
Southwark Crown Court heard MacFarlane had confessed to saying the word "n*****" after the suspect recorded him but said it was not intended as a racist insult.
In a police interview read to the court, the defendant said he had used the term after Mr Demetrio had done so first.
MacFarlane claimed the suspect told officers on duty: "Let the white boy go, keep the n*****," after a white passenger travelling with Demetrio at the time of his arrest was not detained by police.
Jurors were told the suspect had been arrested after a police radio check discovered he was wanted on suspicion of the use, supply or manufacture of drugs and for failing to attend court.
Giving evidence, MacFarlane, a serving police officer for 18 years, said he remembered Demetrio calling officers "white c****" as he was detained in a police van.
"I tried to calm down Demetrio because of his racist abuse towards the police. I challenged him about his language," he said.
"Fairly early on I said to him that if I was to call him a black c*** I'd lose my job."
"He seemed in the impression in my mind that he had low self esteem," he added.
"He referred to himself as a n***** which is not a nice thing to do."
MacFarlane continued: "I wanted him to understand that the police didn't deal with him as a black man and that made no difference at all to how the police dealt with him."
The defendant described Demetrio as giving "relentless abuse" to officers but acknowledged in court that he should not have used the word "n*****".
"I agree it is a word I would choose not to use," he said.
The married father of two said he was "exhausted" at the time of the incident after working 66 hours between 6 and 11 August following the riots which swept London.
He had also recently been told he may have a form of skin cancer, for which he is still receiving treatment, the court heard.
The trial was previously told Demetrio had become "abusive" to officers after he claimed to have been throttled and pushed up against the window of a police van by another officer following his arrest on suspicion of drink or drug-driving.
He used his mobile phone to record a heated exchange with officers.
One recording included an officer calling Demetrio a "scumbag" and a "c***", while a second recording included MacFarlane's alleged racial insult, it is claimed.
The defendant was travelling with seven other officers in a public order unit when Demetrio was stopped on suspicion of drink or drug-driving. No further action was taken for the alleged offence.
MacFarlane denies a charge of racially aggravated intentional harassment, alarm or distress.