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Police have decided to give Greg Shuttleworth, a technician for an Invercargill engineering firm, a formal written warning for his racist tirade.
The incident, in which he called driver Tariq Humayun an "Islam p***k" and told him to "f*** off back to where you come from", was captured on camera around 1am Friday morning.
In the footage, Mr Shuttleworth says he'll pay the $7 fare when "you tell me that you'll piss off back to the country where you come from ... You shouldn't be in New Zealand in the first place ... We don't require your Muslim bulls*** in this country."
Police launched a probe on Monday after mass media coverage, which prompted an apology to the cab driver and his company.
Now, APNZ can reveal the contents of the letter a shame-faced Mr Shuttleworth hand-delivered to his victims yesterday.
"I'm writing this apology to you in regards to my terrible behaviour that happened in one of your taxis... and the terrible words spoken in regards to Muslims..." he writes in a letter to Invercargill Taxis.
Taxi company owner Safinah Mohammed says she accepts the apology.
"He didn't have much to say, he just delivered the letters and he was off," she said.
"The embarrassment has caused him quite a lot of shame, so from that, I'm quite satisfied. We are forgiving people and we want to move on."
Mr Shuttleworth was called in to the local police station for questioning today.
Southland area commander Inspector Lane Todd said police had looked at the evidence available and interviewed Mr Shuttleworth.
"After discussions with the victim, police have taken his views into account in their decision not to prosecute," he said.
"Police have therefore spoken to the man involved and given him a formal written warning and no additional action will be taken.
"Police have a zero tolerance to racial abuse and they say the victim has shown compassion, forgiveness and self-restraint."
There was no answer at Mr Shuttleworth's Otatara home, outside Invercargill.
He has been told to stay away from his work after his employer launched its own investigation.
Mr Shuttleworth says he's open to meeting with the Southland Muslim Association, which has offered to meet him after Ramadan, the Islamic month of fasting which ends soon.
Mrs Mohammed said Mr Humayun, a former Auckland driver, was glad that police didn't pursue a prosecution.
"It makes me feel a lot better knowing that he's not going to be charged. He's had enough public shame."
She passed on Mr Shuttleworth's letter to him, along with a bunch of cards of support.
"I've just left him to deal with things, and when he's ready, he'll come back to me," she said.
"Last week, he was just somebody walking down the road. And now, everybody knows him."