Following a war of words with Perez, she concluded their argument with the message: "omg u should just kill yourself... Like for real... lol what a messy f*ggot you are."
Banks later tried to justify her response, writing: "A f*ggot is not a homosexual male. A f*ggot is any male who acts like a female. There's a BIG difference."
She added: "Really not as moved by this f word thing as u all want me to be. As a bisexual person I knew what I meant when I used that word."
The Gay & Lesbian Alliance Against Defamation (GLAAD) later slammed Azealia for using the word, stating: "Our society knows that 'f*ggot' is a derogatory word for gay men, and in this case it was used to attack someone in a very public altercation with hundreds of thousands of fans and young people following.
"It is an ugly, archaic word that was used to stigmatize a population of people who suffer high rates of violence both here in the U.S. and abroad."
Banks has now said sorry for her Twitter antics, tweeting: "My most sincere apologies to anyone who was indirectly offended by my foul language."
However, Hilton is yet to receive an apology from the 21-year old, who then added: "Not sorry for Perez tho. Lol."
Watch MTV News on the hour every hour on MTV - Sky Channel 126 and Virgin Channel 134