The Celebrity Big Brother house descended into chaos after a contestant thought the "David" who had died was fellow housemate David Gest - rather than David Bowie.
Angie Bowie, ex-wife to the late musician who died on Sunday after an 18-month battle with cancer, was told the news off-screen.
Reacting in the diary room, she said: "I'm fine. I think I'll be better if I can cry, but I can't cry at the moment. I haven't seen him for so many years, I can't make a big drama out of it. I just feel like an era has ended with his passing. I'm so very sad ... now I'm crying."
She added: "Stardust is gone".
Initially she decided to keep the news quiet, telling Gest and John Partridge who had been sent to comfort her in the diary room: "Maybe we should do that, then we wouldn't have to hear all the stupidity."
But after returning to the kitchen, she confided in Tiffany Pollard: "Tiff, you've got to do me a favour. You can't say a word. David's dead."
The US reality star began screaming and asked her if she was joking.
Bowie responded: "I would never joke. Are you crazy, would I do something like that to you?"
As Pollard's hysterics escalated, Bowie commented: "Oh God, this is not going well. Big Brother, I'm in trouble."
Pollard ran outside to tell her fellow housemates, who were stunned and upset - but when they went to check on Gest he was very much alive.
"She told me that David died," Pollard ranted. "Why the f*** would she do that? She just told me that you were dead. That is so f***ing - ! Why the f*** would she do that to me?"
Danniella Westbrook went to tell Bowie that US producer Gest was actually asleep - and had not died of cancer - after which Bowie clarified: "Not that David! My ex-husband."
As Pollard remained furious at having supposedly been misled, her fellow housemates turned against her and rallied around Bowie.
But later, she apologised, saying: "I'm very sorry for your loss, I really am."
Angie and David Bowie divorced in 1980 after a decade of marriage. They had one son, Duncan Zowie Haywood Jones.
Following the uproar, Jonathan Cheban decided to quit Celebrity Big Brother, citing the "bad vibe" in the house.
He told Big Brother in the diary room: "I just think that my time here is kind of expired. The house is not fun any more.
"I'm not really into fighting, Tiffany's insane and it's just going to be a horrible situation here and I just don't want to be a part of that situation. It's getting down and dirty.
"Everybody is getting terrible now, it's a bad vibe in the house, so I really have to get out at this point."
He added: "I'm feeling very emotional because I'm sad that I'm going to go and say goodbye to everybody ... I don't want to be there and get anxious and claustrophobic and freak out about it.
"I just don't know what's going to happen, and I feel like it's time for me to go."
Gemma Collins was distraught to say goodbye to Cheban, as the two had formed a close friendship in the house.
She made him promise to come and visit her at home in Essex, although her description of her interior decor left Cheban disgusted.
He complained: "I hate pink, bubblegum and glitter."
Cheban, 41, a close friend of the Kim Kardashian, is a regular on reality show Keeping Up With The Kardashians, a former PR firm chief executive and founder of luxury lifestyle website TheDishh.com.