Pearce, 49, had to apologise to Paul Ince for allegedly racially abusing him when both were players. The incident bears striking similarities to the racist rant charge facing John Terry, stripped of the England captaincy pending his court case.
The Football Association's decision to remove the armband from Terry led to Capello quitting on Wednesday.
Pearce, playing for Nottingham Forest, allegedly made the comments to
Manchester United's Ince - an England colleague - during a Premier League
game at Old Trafford in 1994.
"Stuart regrets what he said. It was in the heat of the moment. He wants to
make sure everybody knows he is sorry."
England Under-21 boss Stuart Pearce's alleged race row is a further embarrassment to the FA, whose spokesperson Adrian Bevington refused to comment. Chairman David Bernstein called Pearce a "first-class" caretaker and did not rule out a permanent post.