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BBC director general George Entwistle has fallen on his sword 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 that 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."
Standing alongside him, the chairman of the BBC Trust, Lord Patten said it was "one of the saddest evenings of my public life". He said: "At the heart of the BBC is its role as a trusted global news organisation.
"As the editor in chief of that news organisation George has very honourably offered us his resignation because of the unacceptable mistakes - the unacceptable shoddy journalism - which has caused us so much controversy. He has behaved as editor with huge honour and courage and would that the rest of the world always behaved the same."
Culture Secretary Maria Miller said: "It is a regrettable but the right decision. It is vital that credibility and public trust in this important national institution is restored. It is now crucial that the BBC puts the systems in place to ensure it can make first class news and current affairs programmes."
Mr Entwistle, who had been in post for less than two months, has spent virtually the entire time trying to deal with the fall out from the Jimmy Savile child abuse scandal.
The final nail in his coffin was the disclosure on Friday that Newsnight - which had been panned for not running a report exposing scandal - had wrongly implicated Lord McAlpine, a former Tory Party treasurer, in a child abuse scandal in North Wales in the 1970s and 1980s.
In a bruising interview with Radio 4 presenter John Humphrys he admitted that despite all the furore over the scandal, he had been unaware that Newsnight was going to broadcast the North Wales report. He said: "I found out about this film after it had gone out. In the light of what has happened here I wish this was referred to me, but it wasn't. I found out about the film the following day."
Caroline Thomson is the favourite to become the new director general of the BBC, according to Ladbrokes. The BBC's former chief operating officer, as the favourite to replace him at 5/2, followed closely by Ofcom chief executive Ed Richards at 3/1. There is a 5/1 chance that Helen Boaden steps up from BBC's director of news or it is 8/1 that acting director general Tim Davie gets the gig on a full time basis.
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