This answer is even later, but just for the record some of the answers have missed the point.
You can't have HTML buried inside the XML. It will break the XML and that's why the OP is getting the error. The point is that if you want to include arbitrary HTML between the 'text' tags then you need to include it in a CDATA section. CDATA escapes all that is within it, forcing it to be interpreted as simple text not XML markup.
See Moodle_XML_format for an example.
what is CDATA?
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