Tiger Woods' former caddie has caused another sensation, this time by using a racial slur to disparage his old boss.

Adam Scott says his caddie's racial slur against former boss Tiger Woods was taken out of context and his apology should be accepted.

Woods' former caddie has caused another sensation, this time by using a racial slur to disparage his old boss during a caddies awards dinner in Shanghai.

Steve Williams received a mock award on Friday night for "celebration of the year" for his TV interview after Scott won the Bridgestone Invitational.

That was the day Williams said it was "the best win of his life", despite being on the bag with Woods for 13 majors.

At an awards party filled with banter, Williams said of his interview: "It was my aim to shove it right up that black arsehole."

That line drew the biggest reaction at a party attended by several players, caddies, officials and some media.

There was a mixture of laughter and shock, with some players turning to each other with eyes widened and jaws agape.

Scott says the comments at the private party were not meant to leave the room.

"Everything in that room last night was all in good spirits and a bit of fun, probably taken out of that room in the wrong context," Scott said.

"Look, anything with Tiger involved is a story. I value Steve's contributions to my game and having him on the bag."

When asked if Williams should be fired, Scott said, "I disagree with that."

Scott also said it was foolish to suggest Williams was racist.

The provision of the party is that all comments are off the record, yet several caddies couldn't stop talking about it long after it was over.

Approached early the next morning at breakfast, Williams was stunned to learn that British tabloids had gone with the story.

"Why would they do that?" he said. "The whole thing was meant to be fun."

Hours later, Williams posted a comment on his website.

"I apologise for comments I made last night at the Annual Caddy Awards dinner in Shanghai," it said.

"Players and caddies look forward to this evening all year, and the spirit is always joking and fun.

"I now realise how my comments could be construed as racist. However, I assure you that was not my intent. I sincerely apologise to Tiger and anyone else I've offended."

Woods is in Australia, though it didn't take long for the comments to get back to him.

"I was with Tiger last night when he heard the news," Mark Steinberg, his agent said.

"We got multiple calls from people who sounded like they were leaving the caddie party. Tiger obviously wasn't there. He doesn't know exactly what was said. But if multiple reports - which all seem to be accurate - are true, then it's sad it's come down to this."

"It's a regrettable comment, and there's really nothing that Tiger can do or say. He's just going to move on."

It's not the first time Williams has found himself in trouble for his words.

Three years ago at a dinner banquet in New Zealand, he made a disparaging remark about Phil Mickelson. Williams said that was meant in fun, though Woods had him apologise to Mickelson.

Even though Williams said his comments were meant in fun to match the spirit of the evening, there was no disguising the animosity Williams feels over his sacking in July.

What made Williams' reaction at the Bridgestone Invitational so pointed is that it was the first time Woods and Scott were in the same tournament since Williams had been sacked - and it was Scott's first win of the year.

These comments also put Scott in the middle of a mess.

Woods and Scott are to be in the same group next week at the Australian Open, and there's a chance they also could face off at the Presidents Cup in Melbourne the week after.