Out of touch. Out of his depth. Out of a job: BBC Director General George Entwistle quits

George Entwistle last night resigned as Director General of the BBC after 54 torrid days in charge that culminated in a humiliating struggle to defend his position in the wake of a botched Newsnight report on the North Wales children's home scandal.

Outside New Broadcasting House shortly after 9pm he read a statement in which he finally conceded that, as his position made him editor-in-chief of all BBC content, he had to step down in light of the "unacceptable journalistic standards of the Newsnight film".

Newsnight, the corporation's flagship current affairs programme, is under fire for broadcasting a report on 2 November that led to the former Tory politician Lord McAlpine being implicated in the sex abuse scandal at the Bryn Estyn care home. Although Newsnight did not name the peer, allegations made by the abuse victim, Steven Messham, pointed to Lord McAlpine, whose name had already been circulating on the internet. On Friday, Mr Messham admitted he "made a mistake" and Lord McAlpine was not the man who had abused him.

The peer's solicitor, Andrew Reid, has said Lord McAlpine will sue the BBC and those who later linked him to the false allegations.

Mr Entwistle said his resignation was the "honourable thing to do" but it leaves the future of Newsnight in the balance, with no clarity over whether the plug will be pulled on it or not.

One of the programme's regular anchors, Jeremy Paxman, in a statement released through his agents at Capel & Land, blamed budget cuts for failing standards. "George Entwistle's departure is a great shame. He has been brought low by cowards and incompetents," he said. "The real problem here is the BBC's decision, in the wake of the Hutton inquiry, to play safe by appointing biddable people. They then compounded the problem by enforcing a series of cuts on programme budgets, while bloating the management. That is how you arrive at the current mess on Newsnight. I very much doubt the problem is unique to that programme. I had hoped that George might stay to sort this out. It is a great pity that a talented man has been sacrificed while time-servers prosper."

Meanwhile, BBC insiders said last night that other resignations were almost certain to follow. Others whose positions appeared shaky included Helen Boaden, director of BBC news; her deputy Steve Mitchell; and Adrian Van Klaveren, controller of Radio 5 Live, who was drafted in to steady the ship after Peter Rippon, Newsnight's editor, stepped aside pending the investigation into the shelving of the show's Jimmy Savile investigation.

Tim Davie will move into an acting director general role from his position of director of audio and music.

Joining Mr Entwistle outside New Broadcasting House last night was Lord Patten, the chair of the BBC Trust. Lord Patten expressed his sorrow at Mr Entwistle's resignation but criticised what he called "shoddy journalism". Lord Patten said: "He has behaved as editor with huge honour and courage. This is undoubtedly one of the saddest evenings of my public life." The pair refused to take questions from journalists before walking back inside the building.

The Culture Secretary, Maria Miller, said: "It's a regrettable situation 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."

But, appearing on Sky News minutes after the announcement, Labour's former culture secretary Ben Bradshaw said Mr Entwistle had been let down by his staff.

"George Entwistle has not been told what he needed to know when he needed to know it," he said. "He has been hung out to dry. It's an absolute disgrace and a total tragedy for the BBC. Who is going to sort out this mess now?" Mr Bradshaw indicated that the job's responsibilities should be shared out: "It is too much for one person."

Meanwhile, on Twitter, the comedian host of Mock the Week, Dara O'Briain, said: "Never sure what problem is solved by resignations like George Entwistle's." Michael Crick, the former Newsnight journalist now working for Channel 4, added: "A good, decent man, badly let down. V few people could have coped with recent rush of awful events."

The day had been marked by increasingly savage criticism of the Director General after a series of lamentable attempts to explain his lack of knowledge of how the situation had got so out of control.

Barely days after MPs accused Mr Entwistle of an "extraordinary lack of curiosity" over the Savile scandal, the Director General was again lambasted for having no "natural curiosity", this time by one of his own employees, John Humphrys.

The Today presenter humiliated Mr Entwistle in a 16-minute grilling. Mr Entwistle admitted he had not seen the controversial Newsnight or seen the front-page newspaper story on Friday that cast serious doubts on Newsnight's botched report.

Following the 2 November report, the Government has announced two reviews of the way victims of abuse at children's homes in North Wales in the 1970s and 1980s were dealt with by police and subsequently during an inquiry into the scandal. Hundreds of children suffered abuse.

The incoming head of the new National Crime Agency, Keith Bristow, will look at how police investigated the abuse allegations amid claims that senior Tory politicians and other establishment figures may have been involved in the scandal. A High Court judge, Mrs Justice Julia Wendy Macur, will examine the scope of the previous Waterhouse probe into the scandal. One of the main issues will be why 28 alleged abusers were identified during the inquiry but their names protected.

In a hawkish performance, Newsnight's own presenter Eddie Mair raised questions over the show's future on Friday evening, promising only that Newsnight would "probably" be back on Monday.

Liz Gibbons, Newsnight's acting editor who signed off on the doomed 2 November report, could face "disciplinary action", Mr Entwistle had indicated earlier. Ms Gibbons is understood to be on holiday in America, after covering last week's elections. She was overseen by Mr van Klaveren, the Radio 5 Live controller.

Mr Entwistle said before his resignation yesterday that he had considered "a number of things" for Newsnight, including pausing all future investigations "to assess editorial robustness and supervision".

The Director General was unable to offer any insight into how Newsnight's report, which was produced with an outside outfit, the Bureau of Investigative Journalism (BIJ), got it so wrong. He said: "We should not have put out a film that was so fundamentally wrong."

As well as not watching the controversial Newsnight show until the day after it was broadcast, Mr Entwistle conceded he had missed a tweet by the BIJ's Iain Overton hours before the 2 November broadcast claiming that evening's programme would "unmask a senior political figure" as a paedophile.

"I didn't see the tweet," he said. "This tweet, I'm afraid, wasn't brought to my attention, so I found out about this film after it had gone out." He also admitted yesterday he only discovered Newsnight had not asked Lord McAlpine about allegations that he was a paedophile until Friday, a week after the broadcast.

The BBC presenter Jonathan Dimbleby was among those weighing in yesterday, tweeting: "Only upside of new Newsnight disgrace is that editor's decision to drop Savile report may seem wise caution not cowardice."

The BIJ, a not-for-profit investigative journalism organisation based at City University, London, is also facing an uncertain future. It is understood that the BIJ Trust will meet today or tomorrow to decide the fate of Mr Overton, its managing editor, and Angus Stickler, its lead reporter who compiled the report.

Mr Overton, who will have to explain what he knew about the investigation, and why he sent out the infamous tweet on 2 November, said he was aware he could face the chop.

Mr Stickler, an award-winning reporter who previously worked at the BBC for 16 years, will have to explain why he did not show Mr Messham a photo of Lord McAlpine, the man he had named as his abuser.

What they said outside New Broadcasting House last night

George Entwistle's statement

"The circumstances of the past few weeks, and in particular the unacceptable journalistic standards of the Newsnight film that was broadcast on Friday 2 November, have damaged the public's confidence in the BBC.

"As the Director General of the BBC, I am ultimately responsible for all content as the editor-in-chief, and I have therefore decided that the honourable thing for me to do is to step down.

"When appointed to this role, with 23 years' experience as a producer and leader at the BBC, I was confident that I was the best candidate for the post, and the right person to tackle the challenges and opportunities ahead. However the exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader.

"To have been the Director General of the BBC, even for a short period, and in the most challenging circumstances, has been a great honour ... While there is understandable public concern over a number of issues well covered in the media — which I'm confident will be addressed by the review process — I hope you will not lose sight of the fact that the BBC is full of people of the greatest talent and the highest integrity. That's what will ensure it continues to be the finest broadcaster in the world."

Lord Patten's statement

"This is one of the saddest evenings of my public life.

"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."

Chorus grows for departure of former Hong Kong governor

Standing outside New Broadcasting House alongside George Entwistle as he announced his resignation last night, Lord Patten appeared weary, like a man who has remained overlong at a dinner party. In truth, a growing number of critics believe that the chair of the BBC Trust has, after just 18 months in the post, outstayed his welcome.

Unfairly or not, he is this weekend being served a generous portion of the blame for the appointment of Entwistle as Director General. If this were the only charge against Lord Patten, he could probably shrug it off. But it isn't. His critics, and they appear to be recruiting feverishly, accuse him of lacking any understanding of what he is supposed to be doing. In short, they say, he has become the BBC's management's spokesman.

Certainly his heartfelt declaration that Entwistle's resignation saw "one of the saddest evenings of my public life" did nothing to dispel this view. While he did criticise what he called "unacceptable shoddy journalism" at the corporation, he exempted the outgoing DG, who "has behaved as editor with huge honour and courage and would that the rest of the world always behaved the same."

Twitter, the modern voice of the mob, was last night warming up its vocal cords for a roar of disapproval. The barbs ranged from the terse – "Patten next please" – to unflattering comparisons with the hapless Peter Mannion of The Thick of It fame.

The last British governor of Hong Kong, say his critics, compounded his error in appointing Entwistle by failing to appreciate why Newsnight's mishandling of the Savile story was so terrible. They cannot forgive him for a reported comment at a party that: "It's probably good for George to have his first crisis early."

After a distinguished career, goes the received wisdom, it has come to the point where it is time for him to accept that he can no longer handle such a demanding role in public life.