A British woman convicted of racism after calling her Kiwi neighbour a "fat Australian" has had her name cleared.

Petra Mills, 31, was convicted and fined in England last year after calling Chelsea O'Reilly a "stupid fat Australian bitch" in a drunken rant on their street in Macclesfield, northwest England.

Ms O'Reilly was giving a statement to police after a domestic incident in September between Mills and her husband when Mills stormed over to her house and began screaming at her.

At a trial in Macclesfield Magistrates Court, Ms O'Reilly said: "She called me a stupid, fat, Australian bitch. Because of my accent there can be some confusion over my nationality. She knew I was from New Zealand."

"She was trying to be offensive. I was really insulted."

Mills told the court she shouted at Ms O'Reilly but it had nothing to do with racism.

"I did not use the word Australian. I used to live with an Australian person. She was very nice."

Mills, 31, was fined STG110 ($A162) for racially aggravated public disorder and STG200 for kicking a police officer during her arrest.

She was also ordered to pay STG50 compensation and STG500 court costs.

However, Chester Crown Court last week overturned the decision, the Manchester Evening News reports.

A judge ruled that using the word "Australian" was not racist.

Mills has moved to Wales following her conviction, and told the newspaper she would never forget the "stress and embarrassment" she had been through.

"I am not a racist and I still don't see how what I said could ever be thought of as racist."

Her fine for the disorder charge, and the compensation order, were both quashed.

Mills' fine for assaulting the police officer was reduced to STG85.

 

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