George Entwistle announces his resignation as BBC director-general, seven weeks after moving into the post, after a Newsnight report which wrongly implicated a senior Tory politician in child abuse.
Mr Entwistle, speaking alongside BBC Trust Chairman Lord Patten, said: "I have decided that the honorable thing to do is to step down."
Last week an edition of BBC Newsnight incorrectly implicated Lord McAlpine, a former Conservative party chairman, in the abuse scandal at the Bryn Estyn children's home in north Wales - although not identifying the Tory peer by name.
The BBC subsequently issued an unreserved apology after Steve Messham, one of the victims interviewed by Newsnight, admitted he had wrongly identified Lord McAlpine as the man who abused him in the 1970s and 1980s.
Mr Entwistle said in a statement outside Broadcasting House on Saturday night: "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."
An extract from George Entwistle's letter of resignation
Lord Patten, chairman of the BBC Trust, added: "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."
Tim Davie, the BBC's director of audio and music, who has been named as the chief executive of BBC Worldwide, will stand in as director general.
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."
Days of speculation
Saturday's announcement follows a day of speculation about Mr Entwistle's position. In an interview BBC Radio 4's Today programme on Saturday morning, Mr Entwistle told interviewer John Humphrys: "We should not have put out a film that was so fundamentally wrong.
"What happened here is completely unacceptable."
Lord McAlpine has indicated that he now intends to sue the BBC after the Newsnight investigation led to him being identified on the internet.
Earlier today Mr Entwistle insisted he had no intention of resigning as director general.
Today the widow of another child abuse victim told Channel 4 News that her late husband was also shown a photo and given the name by McAlpine by police.
Watch below for the report from Channel 4 News.
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