SYDNEY (REUTERS) - Australian mining magnate and politician Clive Palmer has apologised to China's ambassador to Australia for a tirade in which he referred to the Chinese government as "bastards", setting off a firestorm in Canberra and Beijing.

The apology, in the form of a letter to Ambassador Ma Zhaoxu, came after Australian Prime Minister Tony Abbott and China's Ministry of Foreign Affairs condemned his remarks aired on television on Aug 18.

"I regret any hurt or anguish such comments may have caused any party and I look forward to greater understanding for peace and cooperation in the future," Palmer, whose Palmer United Party holds the balance of power in parliament's upper house, wrote in a letter addressed to the ambassador.

"In keeping an open mind, I now come to the realisation that what I said ... was an insult to Chinese people everywhere and I wish to assure them they have my most genuine and sincere apology," he wrote.

"I am sorry that I said the things I said."

Palmer released the letter dated Aug 25 to the public on Tuesday.

The Chinese embassy could not be reached for comment.

China is Australia's biggest trade partner with two-way trade approaching US$150 billion (S$187 billion), representing more than 20 per cent of Australia's total trade.

Palmer had earlier insisted his live-to-air comments were directed at a Chinese company he's battling in court, not the Chinese government or people.

The billionaire tycoon is locked in a legal fight with Chinese firm CITIC Pacific Ltd over cost overruns and royalty payments involving the Sino Iron project in Western Australia, China's biggest foreign mining investment.

Palmer has been a thorn in the side of Abbott's government since his Palmer United Party won three seats in Australia's senate at last September's elections. After holding the new senate hostage over the repeal of Australia's controversial carbon tax for weeks as he haggled for concessions, he has now vowed to block the budget in its current form.