BBC Newsnight: MPs urge speedy BBC response
The BBC has been urged by MPs to act quickly to restore confidence after a Newsnight report led to an ex-senior Tory being wrongly implicated in child sex abuse at Welsh children's homes.
Culture Secretary Maria Miller spoke of the need to restore "credibility" after the director general said the report should not have been broadcast.
George Entwistle has apologised unreservedly to Lord McAlpine.
He said he was only aware of the story after it was broadcast.
Shadow culture secretary Harriet Harman said there were "systemic problems" over the report.
And the Commons media committee chairman John Whittingdale said the BBC needed "to act very swiftly in order to try to restore some public confidence".
Newsnight reported on 2 November an abuse victim's claims against a leading 1980s Tory politician.
Lord McAlpine, although not named on Newsnight, was wrongly identified on the internet as the alleged abuser at care homes in Wales in the 1980s.
The former senior Tory has said the claims were "wholly false and seriously defamatory".
The abuse victim, Steve Messham has apologised to the former Tory treasurer during Margaret Thatcher's leadership, after saying he did not assault him. Mr Messham said in the 1990s he was shown a photograph by police of his alleged abuser but was incorrectly told it was Lord McAlpine.
BBC Scotland director Ken MacQuarrie has been asked to report to the director general by Sunday on what happened with the Newsnight investigation.
The culture secretary said the "BBC Trust needs to get to the bottom, and quickly, of what has gone wrong at the corporation".
"The events of the last few days only serve to underline the vital importance of restoring credibility."
And shadow culture secretary Harriet Harman said "something has gone badly wrong at Newsnight".
She said: "The director general only took over the leadership of the BBC eight weeks ago, but he needs to show decisively that he is addressing the systemic problems which are in evidence here."
Mr Entwistle told BBC Radio 4's Today programme: "We should not have put out a film that was so fundamentally wrong. What happened here is so totally unacceptable."
He said disciplinary action would be taken if necessary.
But asked if he should have been aware of it as he is the editor-in-chief, he confirmed he had not known in advance the report was to be broadcast.
Last month Mr Entwistle was questioned by the Commons culture, media and sport select committee over his handling of Newsnight's decision not to show a report into alleged sexual abuse surrounding late BBC presenter Jimmy Savile.
He is expected to attend a committee session, alongside BBC Trust chairman Lord Patten this month, and chairman Mr Whittingdale said he would consider bringing this forward.
"How on earth was this allowed to happen? This was the most serious allegation that could be made against an individual and it was broadcast without proper checks being made," he said.
He stopped short of calling for Mr Entwistle to resign but said: "There has been a failure of management at every level. At the end of the day the director general of the BBC is the editor-in-chief and he has to bear responsibility."
Labour's Ben Bradshaw, a former culture secretary and another member of the committee, told the BBC Mr Entwistle had to "get a grip".
He said "it certainly feels from the outside that BBC News management is now totally dysfunctional" although he also did not believe Mr Entwistle should stand down.
The Conservative MP Conor Burns, who sits on the culture committee, told the BBC the current "terrible situation" showed "something very serious has gone wrong in BBC journalism."
He said Mr Entwistle's "rather faltering and uncertain performances on the media... are unlikely to restore confidence".
Tory Rob Wilson also said: "I think there are questions for George Entwistle about whether he is the right person to lead the BBC out of the difficulty and the crisis it finds itself in."
Meanwhile, the trustees of Bureau of Investigative Journalism organisation, a co-contributor on the Newsnight story, said it was "appalled at what appears to be a breach of its standards".
It said: "To the extent that the principles of The Bureau have been ignored by an involvement in this story, remedial action will be taken against those responsible."
The BBC Trust, the corporation's governing body has also apologised.
"The Trust has impressed upon the DG the need to get to the bottom of this as a matter of the utmost urgency and will expect appropriate action to be taken as quickly as possible."
Lord McAlpine's solicitor, Andrew Reid, said the peer would take legal action against those who later named and linked him to the false allegations.
The BBC has ordered an "immediate pause" in Newsnight investigations to assess editorial robustness and a suspension of all co-productions with the Bureau of Investigative Journalism.