Speaking after a meeting with Mario Monti in Italy, David Cameron said George Entwistle's BBC pay-off is "hard to justify".
He added that radical and urgent changes were required - but stressed that that should happen with Lord Patten remaining as chairman of the BBC Trust.
More top news
Police have asked for help identifying a man who started an 'incredibly dangerous' fire at a petrol station in south London.
The Metropolitan Police is to pay over £400,000 in compensation to a woman who had a child with an undercover officer.
Local councils want ban on term time holidays scrapped because it is too rigid.