MPs have delivered a scathing assessment of the way the BBC paid off George Entwistle at the expense of the licence fee payer.
The Prime Minister's spokesman has said George Entwistle's £450,000 pay-off is "hard to justify", but it is a matter for the BBC Trust.
Two senior BBC figures have "stepped aside" as a result of a botched Newsnight investigation.
A BBC Trust spokesman said the PAC's work had "helped inform" the corporation's plan to simplify the way it was run which were announced last week.
We greatly regret that licence fee payers were let down by this episode. They are entitled to expect that their money is spent wisely. Since 2009, the trust has worked successfully with the executive to drive down senior manager pay; and we support Tony Hall's speedy action to impose a cap on severance payments in the future.
We have already announced measures that address the committee's call for more rigorous scrutiny of the BBC's performance and clarify the Charter's requirement that the BBC Executive manages the BBC while the trust represents the licence fee payer.
As part of implementing these measures, we will pursue the committee's recommendation that the trust and executive record and communicate decisions properly so that audit concerns raised in the PAC report are addressed.
In addition, the trust's scrutiny role will, in future, be much more transparent, so that licence fee payers themselves can judge how well the BBC is run.
The Public Accounts Committee has said that 150 senior managers of the BBC have between them received payoffs totalling £25 million.
Chairperson Margaret Hodge said they were "dismayed to find that many of these individuals received 'sweeteners' in their severance packages that were far larger than the sums to which they were contractually entitled."
The MP also accused the BBC Trust, the corporation's governing body, of "sitting on its hands" while the pay-offs were being made.
A committee of senior MPs has accused the BBC of putting "its reputation at risk" in handing over excessive payoffs to senior staff.
Margaret Hodge, who chairs the Public Accounts Committee, said some of the justifications for the pay-offs had been "extraordinary".
She said there was "a failure at the highest levels of the BBC to challenge payments to senior managers and what appears to have been a culture of cronyism that allowed for the liberal use of licence fee payers' money".
The public spending watchdog is to investigate BBC severance packages after it emerged almost 200 senior managers received pay-offs of more than £100,000 each in the past three years.
The National Audit Office (NAO) will examine the situation after MPs said pay-offs for senior BBC figures had been "excessively generous".
The investigation was sparked after George Entwistle, the former director general, stood down over the Jimmy Savile scandal with a £450,000 pay-off.
Today an NAO spokesman said the decision to look at BBC severance packages was taken in the light of Mr Entwistle's departure.
A spokesman for the BBC Trust said: "The chairman previously suggested that it would be useful for the NAO to look not just at the package George Entwistle received, but at severance pay in the BBC more widely.
"We have received their schedule of work for 2013 and we are pleased to see that they will take this approach in a planned review for next year."
BBC Trust chairman Lord Patten said the BBC had been advised it was not possible to try and get back the almost half a million pound pay-off warded to departing director-general George Entwistle. He told UK editor Lucy Manning yesterday:
"We have taken legal advice, and we would have needed I think, to be able to demonstrate that the report would have enabled us to do a summary dismissal, when he was working at the BBC, and the legal advice was we couldn't do that"
Helen Boaden, director of BBC News has returned to work today, saying it is not her job to decide if she should still be in post.
She also dismissed suggestions that the public's trust in the national broadcaster had diminished. She said:
"It is still the most trusted news organisation in this country"
The Public Accounts Committee says the Comptroller and Auditor General offered to carry out an immediate examination of the package awarded to George Entwistle, but the BBC Trust turned the offer down. That meant Parliament was unable to hold the Trust to account for its use of public money.
Chair of the Public Accounts Committee, Margaret Hodge, said there were a total of ten people who had left the BBC over the past few years who had walked away with over £250,000. She said some of the sums "beggar belief".
This is the package former BBC Director General George Entwistle received when leaving the corporation:
- Lump sum of £450,000, twice what he was contractually entitled to
- 12 months private medical cover
- Contribution to the cost of his legal fees
- Public relations advice to deal with press interest
The Public Accounts Committee said this "cavalier use of public money" was out of line with public expectations and what is considered acceptable elsewhere in the public sector.