The decision to drop the Newsnight investigation into the Jimmy Savile sexual abuse allegations was "flawed" and plunged the BBC into "chaos and confusion", according to a review.
The review by former Sky News executive Nick Pollard, said of the decision:
The decision to drop the original investigation was flawed and the way it was taken wrong but I believe it was done in good faith.
It was not done to protect the Savile tribute programmes or for any improper reason.
ITV News' UK Editor Lucy Manning Editor reports.
After the report, which cost around £2 million, was published, it was revealed that Newsnight editor Peter Rippon and his deputy Liz Gibbons are to be replaced.
In a statement, Mr Rippon said he did not agree with the conclusion that his decision to drop the story was "flawed" but he said "I will learn lessons from what has happened, as I move on with my career."
Two of the reporters who worked on the original Newsnight investigation gave very strong statements criticising the BBC.
Liz MacKean said the corporation had breached its duty to the women they interviewed who said Savile a paedophile.
Meirion Jones said: "I hope the BBC takes measures to make sure nothing like that will ever happen again".
The Pollard Review also that revealed former director-general George Entwistle ignored warnings when he was BBC Director of Vision of "a darker side" to Savile.
There was also criticism of Mr Entwistle for an "unnecessarily cautious" approach when Director of News, Helen Boaden, told him at a lunch of the Savile investigation.
It also found that the BBC's management structure has "proved completely incapable" of dealing with the Savile affair and that "the level of chaos and confusion was even greater than apparent at the time".
It added that "leadership and organisation seemed to be in short supply."
Director of News, Helen Boaden's attempt to alert Mr Entwistle to potential problems posed by the Savile story was deemed "too casual".
She was also criticised for not taking "greater responsibility" as crisis grew but will resume her role on Thursday after stepping aside during the inquiry.
Boaden's deputy, Stephen Mitchell - who was also criticised in the report - has resigned and will retire next year.
In a statement, he said: "Having endured the Pollard review process and now having read its criticisms, I have decided that it is in my interests and those of the BBC that I bring my career to a dignified end.
"Whilst I feel vindicated that the review has found that I put no undue pressure on Peter Rippon, I disagree with the remainder of Mr Pollard's criticisms in relation to me."
Speaking at a news conference, acting Director-General,Tim Davie, defended the BBC's disciplinary actions over the affair, saying:
The director-general has left the BBC, the deputy director of news has left the BBC and we're putting a totally new team in to Newsnight.
Now I think there will be a lot of people with theories about what we should or shouldn't have done, I would say - go to the report and look at it calmly and think about what is fair and proportionate.
That's what I've done and I think we've made the right decision.
ITV News' UK Editor Lucy Manning spoke to BBC Trust chairman Lord Patten about the review's findings and the future implications for the BBC.
He also defended disciplinary action taken against its staff.
The Culture Secretary, Maria Miller, welcomed the publication of the Pollard Review which she said raised "serious questions around editorial and management issues" which she hoped the BBC Trust would tackle.
– The Culture Secretary Maria Miller
It remains critical that we do not lose sight of the most important issue in this - the many victims of sexual abuse by Savile.
I urge the BBC to now focus on the review into those abuses, and ensure it is swift and transparent.
I will remain in close touch with the Trust as they oversee this work.