The DIY SOS presenter is currently starring in an advertising campaign for Nestle breakfast cereal Shreddies in which he appears wearing a hard hat and tool belt - as he appears in the BBC renovation series - and offers DIY advice to a family about starting their day.
BBC editorial guidelines stated: "Actors and artists who perform in BBC output should not appear in promotional work, including advertisements, in a way which mimics or replicates their on-air roles for the BBC."
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A spokesperson for the BBC and Knowles told Yahoo UK in a joint statement: "Both the BBC and Nick are keen to resolve this matter and are working together to seek a solution."
The breakfast cereal advert sees Knowles, 58, appear from a laundry basket declaring: "Sounds like you need Nick 'Get it done' Knowles. I bought the hospital I was born in. I can put up a shelf just by looking at it."
He then pours cereal into a builder's helmet instead of a bowl and offers a father and son tips on getting their day started successfully, using other construction props and saying: "When things get tough, don't eat soft."
Knowles has been the main presenter of BBC One home renovation show DIY SOS since 1999, in which a team of builders help improve a family's life by giving their home a full construction makeover.
The last series of the show aired on the BBC between November 2020 and February this year.
The former I'm A Celebrity... Get Me Out Of Here! contestant - who released his first and only album in 2017 - revealed last year that he had helped Captain Sir Tom Moore and his family to cope with adjusting to life in the public eye after the late veteran's successful fundraiser for the NHS during the coronavirus pandemic.
Knowles told Yahoo UK: "I was able to line up somebody a proper PR person who could actually look after and help them with handling the world's press, which actually may sound like a very small thing but it's very stressful because obviously they were getting calls morning, noon and night and barely sleeping and actually having somebody who knows how to control that helped enormously."
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