NPR radio show This American Life has been forced to retract one of its broadcasts after the author was found to have fabricated part of the story.
Actor Mike Daisey had written about his visit to Foxconn factories, where Apple products are made, in China and documented the abuses there.
But on hearing the broadcast - the show's most downloaded to date - a reporter living in China became suspicious of some of the facts.
Rob Schmitz travelled to meet with Daisey's translator and discovered that many parts of the story had indeed been made up.
In a major embarrassment, This American Life has retracted the show and devoted its entire Friday broadcast detailing how the mistake happened.
'We're horrified to have let something like this onto public radio,' host Ira Glass said, adding it was offensive to hard-working journalists.
The story had not been commissioned by the show but was an excerpt of Daisey's one-man show The Agony and the Ecstasy of Steve Jobs.
The episode, which aired on January 6, detailed the harsh working conditions where workers assemble Apple devices such as iPhones.
In the story Daisey claims to have witnessed abuses, such as underage workers and those suffering from Hexane poisoning from cleaning the gadgets.
But on Friday's show, Glass said: 'As best as we can tell, Mike's monologue in reality is a mix of things that actually happened when he visited China and things that he just heard about or researched, which he then pretends that he witnessed first hand.
'And the most powerful and memorable moments in the story all seem to be fabricated.'
When the show aired, Schmitz found a few facts suspicious, such as factory guards carrying guns and the fact that poor workers discussed their worries in Starbucks.
He flew to China where he found Daisey's translator, who said that many details - and the timeline of events - had been fabricated.
This American Life said that while it had fact checked Daisey's work - and details were true - it had been unable to contact his translator.
They admitted they should have pulled the story but decided to run it anyway. Yet they claim Daisey should have known better.
'He had to be truthful. And he lied to us,' Glass said.
The translator revealed Daisey had lied about the number of factories they had been to and that they had never met people poisoned by Hexane.
Daisey, speaking on the retraction broadcast, admitted he had not met workers who were as young as 12, as he had previously claimed.
He admitted he felt conflicted about saying things he knew were not true. But he said he was worried people would stop caring about the abuses at the factories if he failed to present the story in a dramatic way.
'I'm not going to say that I didn't take a few shortcuts in my passion to be heard,' he told Glass.
In a posting on his blog, Daisey said he stood by his work and that his only regret was that he allowed the show to air an excerpt from his show.
Caught: Reporter Rob Schmitz told the radio show he was suspicious of the story and quizzed Daisey's translator
Listeners downloaded his report 888,000 times, making it the single most popular podcast in the history of This American Life.
Despite the controversy, the episode sparked a petition signed by 250,000 people on Change.org that demanded Apple guarantee ethical treatment for workers.