The host of a German satirical show has said his team faked a video showing Greek Finance Minister Yanis Varoufakis "giving the finger" to German creditors.

The clip made headlines all over the world, almost causing a diplomatic incident between Athens and Berlin, amid tense relations between the two governments share over Greece's bailout terms.

Varoufakis, who had vehemently denied the footage was genuine, was proven right by Jan Bohermann, the presenter of satirical programme Neo Magazin Royale, which is broadcasted by public television ZDF.

"Sorry Mr Varoufakis, we won't do it again," Bohermann said, confessing that his production team had manipulated the original footage filmed at a Zagreb conference in May 2013, when Varoufakis was not yet minister.

In the clip, the future minister was seen addressing an audience in English and criticising the government in Athens for accepting the austerity conditions attached to the European Union financial bailout.

"Greece should simply announce that it is defaulting, just like Argentina did, within the euro in January 2010, and stick the finger to Germany and say 'well now you can solve this problem by yourself.'"

Neo Magazin Royale's team used digital production techniques to add an obscene gesture to the images.

"We found it a nice twist to make it look like he is showing the finger while saying that sentence," Bohermann said.

Varoufakis was confronted with the doctored footage as he appeared live on a German political discussion show.

Show host Günther Jauch told him: "The middle finger for Germany, Mr Minister? The Germans pay the most, and are criticised the most for it. How does that go together?"

Varoufakis replied the video was doctored and that he had "never given the finger ever".

After the faking was revealed, he praised the prank and demanded an apology from Jauch on Twitter.

The minister had already been the target of Neo Magazin Royale in February as the show published a viral music clip titled V for Varoufakis ironizing on his difficult relation with Germany.