BBC director general George Entwistle has resigned tonight over the “unacceptable” Newsnight broadcast which wrongly implicated a senior former Conservative in a child abuse scandal.
In a brief statement outside Broadcasting House, Mr Entwistle said he had decided to do the "honourable thing" and step down from his post.
"When appointed to the role, with 23 years' experience as a producer and leader at the BBC, I was confident the trustees had chosen the best candidate for the post, and the right person to tackle the challenges and opportunities ahead," he said. "However the wholly exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader."
Late last night the BBC "unreservedly" apologised for broadcasting the allegations after abuse victim Steve Messham admitted the man who abused him in the 1970s and 1980s was not Lord McAlpine of West Green.
The 70-year-old peer found himself at the centre of a storm of internet speculation after Mr Messham told BBC2's Newsnight he had been abused by a senior Conservative from the Thatcher era when he was a teenager at a north Wales children's home.
In a statement, the corporation said: "We broadcast Mr Messham's claim but did not identify the individual concerned. Mr Messham has tonight made a statement that makes clear he wrongly identified his abuser and has apologised.
"We also apologise unreservedly for having broadcast this report."
Solicitors for Lord McAlpine have indicated they are preparing to sue for defamation, saying their client's reputation had been left in "tatters" as a result of the programme.
Mr Entwistle moved swiftly to try to limit the damage, appointing BBC Scotland director Ken MacQuarrie to produce an urgent report into what had happened. He said this morning the report should never have been broadcast and warned that staff involved in the programme shown last week could face disciplinary action.
There will be an immediate "pause" in all ongoing Newsnight investigations while the BBC is suspending all co-productions with the Bureau of Investigative Journalism which worked on the north Wales investigation.
Mr Entwistle admitted under questioning from his own journalists that he had not known in advance about the Newsnight report, weeks after being accused of being too hands-off over the previous scandal on the same programme.
"In retrospect I wish this had been brought to my attention," he said, adding that he should not be expected to be familiar with the BBC's entire news output.
Mr Entwistle, in the job for only two months, initially said he would not resign, but criticism was growing that a 90-year-old institution was systematically incapable of addressing its failings.
"I listened to the director general with increasing disbelief," John Whittingdale, chairman of parliament's powerful media committee, told Reuters. "The level of failure of management at every level within the BBC, up to and including the director general, is just extraordinary."
The disclosures came as another huge blow for the corporation which is still reeling from the Jimmy Savile scandal, including a decision to drop a Newsnight investigation exposing the late DJ as a serial child abuser.
Last night's edition of Newsnight - which went out under the supervision of a senior news executive - carried a full, on air apology for the broadcast on November 2nd.
The programme had included an interview with Mr Messham who described how he used to be taken from the Bryn Estyn children's home to a hotel near Wrexham to be abused by men, including one described as a senior Conservative from the Thatcher era.
Lord McAlpine yesterday finally broke cover to issue a vehement public denial of the "wholly false and seriously defamatory" claims against him.
His solicitor, Andrew Reid, criticised the way the programme had broadcast Mr Messham's allegations without stating to whom they referred - sparking the internet storm around his client.
"They took what I think is the coward's way out. They ran the programme, trailed it, and then told everyone where to go and look for the name. In my view, that is creating the defamation," he said. "They have done a very, very good job in severely damaging Lord McAlpine's reputation."
The disclosures are also potentially embarrassing for British prime minister David Cameron who rushed to order two new inquiries into the north Wales child abuse scandal following Mr Messham's allegations, even though he was out of the country on a visit to the Middle East.
On Thursday, Mr Cameron warned against a "witch-hunt" after presenter Philip Schofield tried to hand him a list of alleged paedophiles live on air on ITV1's This Morning.
PA