My silly comment blew up wider family now dh miserable

Yes, and I do it pretty regularly.

Not a half "apology" like you recounted in your OP. That's closer to saying "well that's me told" than an apology. Tell your niece directly that you're sorry you said something hurtful to her.

Yup. Straight up if you accidentally offend you apologise right?

I'm curious OP. Does your SIL ever say or do anything that offends you, and if so does she apologise?

Don’t think my kids were ever treated as inferior when they visited NZ but they did get ribbed for their ‘Pommie’ accents and ways. When they were v little the Kiwi’s thought they were cute but the NZ way is to take the mick (don’t worry plenty of Irish family too) out of everyone. My now adult kids are pretty robust and perhaps being exposed to a range of people and behaviours has contributed to that.

This is our experience 100% too (but Aus instead of NZ). And I’m from yet a different country, and they took the mick out of me too in Aus, but I soon got used to it and knew it was actually in a friendly way. My adult kids even make fun of people from NZ but in a friendly way which I’m sure some people where we are now wouldn’t understand.

It was racist.

She doesn’t aspire to be British. She IS British. Would you have said something like to one of your children if they didn’t like the pudding? Or any white person?

You were racist. Own it and apologise.

Bloody hell. I gasped at that. No wonder SIL has taken it badly.

You're right, the latter is arguably worse.

But the point is that OP has said something hurtful to her family, even if it was unintentional. OP's own children immediately recognized that, it wasn't just her SIL. She's failed to properly apologize to her niece for her hurtful words, so it's not surprising that her relatives think she must stand by them to some degree.

OP, before you start digging in and trying to rally support to label your in-laws the unreasonable ones and yourself the victim, apologize. You don't have to take responsibility for motives that didn't exist, but you should sincerely apologize for saying something that was hurtful. Clean up your own side of the street first.

Because they're stupid enough to be confused between 'third country' and 'third world country'.

OP, kindly. I think you need to reflect a little bit about the way you talk about her "bigging up her Britishness" and "code switching". She is half British. It's who she is, not something she is putting on to gain cool points.

If you are easily definable as one particular nationality, you have no idea of the way people with dual nationality or mixed cultural heritage are constantly asked to justify themselves - even 'jokingly'. Your clumsy comment does not exist in isolation. It is one drop in an ongoing stream of challenges to her cultural identity.

British people in particular find it difficult to understand the importance of cultural identity because we can go anywhere in the world and our culture is understood. We almost never have to explain ourselves - and because it takes absolutely no headspace for us, some people can be a bit eye-rolley when people take it so seriously. It is a micro-aggression borne of unexamined privilege.

My own children have been asked several times why they speak with a British accent. It's just how we speak at home! It's literally their mother tongue - and they are asked to defend themselves and justify it by people who aren't racist, but are just interested in how it came about! Ha ha, what an interesting thing to discuss. Again.

So basically we want the OP to apologise to her niece for something to which her mother took offence on her behalf ?

I did admit I had been brought to book in public if you see the OP. This is actually what caught my attention most from your original post: This was met with gasps from my teen kids and I said "sorry I've been brought to book there". I may be misinterpreting, but it sounds like you back-pedalled on your comment because others reacted negatively to it, not because you understood why it might be hurtful and genuinely reconsidered. It may even have come across as if you were feeling silenced by your childrens' reaction to what you still considered a perfectly good comment. If you know you hurt your niece and you didn't mean to, a sincere apology may help, but only if you understand why it was hurtful.

For what it's worth, I was (am) in a similar situation to your niece except with three citizenships - my mother's country, my father's country and the country where I was born and (mostly) grew up. I didn't choose any of these countries, not sure I WOULD have chosen them, but they were (are) mine. Not one more than any of the others. And nothing to do with how desirable each citizenship might be to the rest of the world. If someone had told teenage me she was "aspiring" to be any of these nationalities, she'd have assumed they were confused and tried to explain the situation. It would have been really strange coming from someone who already understood the background, like an aunt.

Also it's not fair to judge your under-18 niece for not having lived in the UK, as if that diminishes her right to do so or makes her interest in the culture somehow phony or pretentious or laughable. She's a child; she hasn't had a choice in the matter. If someday she's 60 and has still never lived there but remains convinced it's the best place in the world to live, then sure, take the piss, but not now.

As far as her not eating the pudding, I'm not sure why she would make something she didn't want to eat (unless perhaps it was made for someone else who loves it) but even the British part of my brain doesn't think it was rude of her not to eat her OWN cooking - to whom was she being rude, in that case?

I do appreciate things are different for everyone and understand that your Malaysian friend must have been bemused at the least by her obviously thick colleague.

Don’t think my kids were ever treated as inferior when they visited NZ but they did get ribbed for their ‘Pommie’ accents and ways. When they were v little the Kiwi’s thought they were cute but the NZ way is to take the mick (don’t worry plenty of Irish family too) out of everyone. My now adult kids are pretty robust and perhaps being exposed to a range of people and behaviours has contributed to that.

Treading on someone’s foot is not the same as making a comment you neither recognised or intended as racist.

Why not? That just shows how little YOU think of of those countries, not the OP!

The problem is that a lot of people do have the attitude that if you are not born of two parents of the same nationality you are not of that nationality.

My dc have had racist comments made to them about not being 'really' of one of their nationalities, because they don't speak the language with us. So people are sensitive to anything that implies that kind of thing.

Think you misunderstood - there are 3 countries referenced - Britain, the SiL’s country and the country that they live in… which was the ‘third’/other country.

There are other reasons for being careful all the time around certain people. From what OP has said SiL is hyper sensitive because of racism she’s experienced in the UK. There’s clearly a mix of race and cultures here so OP is potentially navigating a minefield. Doesn’t mean she’s racist.

I agree with this and it was this post where OP revealed her attitude and general approach to DN which is thoughtless at best. It's not 'hilarious' to switch between accents. I did this as a child, at first without realising, and then became overtly aware I was doing it and felt embarrassed but couldn't stop.

Honestly, OP, it's pretty bad. My dd is mixed race, and both heritages are very important to her. We live in the UK, so she has had to work much harder to cultivate strong ties to her dad's home country, and it is a sensitive subject for her because she feels a bit less entitled to claim that side of her heritage. To address that, she does take a particular interest in all aspects of her dad's culture.

She would be so, so hurt by a casual comment like this. Completely dismissing her right to identify with that particular culture in one little remark. Your dn may be feeling the same. Identity can be a complex issue for kids with mixed heritage.

Then layered on top of that is the race aspect, where they may be interpreting your comment as meaning that she isn't British because she is mixed race.

I believe you when you say that you didn't mean any harm, but the reality is, you have demonstrated through your remark that you just don't see your niece as being "properly" British. It may be hard to come back from that, but a sincere apology would be a good starting point.

Maybe she wanted to have a go at something new, even though she was not super into eating it herself?
I dont eat beef, but cook it for my family because I know they like it.

When I accidentally trod on someone's foot or bump into them I apologize. An absense of ill-intent doesn't mean we don't need to take accountability for our clumsiness.

When someone refuses to genuinely apologize for hurt they've caused (especially to a loved one) that often tells me more about them than the original incident.

I think, in general, if you go through life looking for things to be offended by, you easily could spend your whole life doing that.

I think that sometimes it’s something else you’re angry about, but maybe you don’t even know yourself what that is, so then you find other things that validate those feelings.