Pressure mounted on Chris Patten, chairman of the BBC's governing board, on Monday after the world's largest broadcaster was plunged into crisis following the resignation of its chief executive in a sex abuse row.
The broadcaster's Director-General George Entwistle quit late Saturday, just 54 days into the job, after the flagship BBC programme Newsnight admitted it had wrongly implicated a politician in abuse at a Welsh children's home.
His departure leaves the organisation in chaos as it struggles to restore trust in its journalism and battles the scandal surrounding Jimmy Savile, the late BBC television star now alleged to have been a prolific child sex offender.
Patten, the chairman of the BBC Trust, said there must now be a "thorough, structural, radical overhaul" of the way the BBC was run, although he said he would not be resigning over the row.
However, calls for Patten to quit intensified after it was reported Entwistle would receive a £1.3 million ($2 million, 1.6 million euros) pay-off.
Entwistle will leave with a £450,000 lump sum plus a £877,000 pension plan, the Daily Telegraph reported on Monday.
Conservative lawmaker Philip Davies said it was "yet another reason" why Patten should resign.
Former Labour press chief Alastair Campbell said Patten's role "surely has to come under proper examination now.
"Not just in relation to the appointment process, but also in relation to the uncomfortable position that makes him both cheerleader and regulator. It is unsustainable," Campbell wrote on his blog.
Monday's Daily Mail ran with the front page headline "Can Patten survive? As Newsnight storm grows and director general gets £450,000 payoff, BBC chairman faces calls to quit over what HE knew".
The allegations against Savile, who died last year aged 84, and the botched Newsnight report have left the BBC facing one of the most serious crises of its 90-year history.
"The wholly exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader," Entwistle said in a statement outside the broadcaster's London headquarters Saturday.
The announcement came the day after Newsnight was forced to apologise for wrongly implicating a senior Conservative party figure in abuse at a Welsh children's home in the 1970s.
The director-general admitted he had no knowledge of the show before it was aired, in itself a source of criticism, but said quitting was "the honourable thing to do" since he was ultimately responsible for all the BBC's output.
He has been temporarily replaced by Tim Davie, a former Pepsi executive who is currently the BBC's director of audio and music, while the BBC Trust finds a more permanent replacement.
The decision will be made "within weeks", according to a report in The Times on Monday.
Former BBC chief operating officer Caroline Thomson has emerged as one of the bookies' favourites to land the role.
A major police investigation is currently underway into claims that Savile abused up to 300 children over a 40-year period, including on BBC premises.
The probe has so far resulted in the arrests of former glam rocker Gary Glitter and comedian Freddie Starr, while a third man was arrested on Sunday and subsequently bailed.
Wilfred De'ath, 75, who produced a radio show for Savile, told the Telegraph newspaper online that he had been arrested at his flat in Cambridge. He said he was a victim of mistaken identity.
Amid outcry at how Savile could have got away with it for so long, the BBC has also launched its own inquiries into the scandal.
Patten said he was keen to see these through, as well as the urgent review Entwistle had ordered into the Newsnight fiasco.
Entwistle, who first joined the BBC as a broadcast trainee in 1989, was under pressure to explain the Savile scandal from almost the moment he was installed as director-general on September 17.
This included a row over why Newsnight dropped an investigation last December into claims against the late presenter. The BBC has denied suggestions it axed the report because it would clash with a Christmas tribute to Savile.
Culture minister Maria Miller welcomed his departure as "regrettable but the right decision".
But Newsnight anchor Jeremy Paxman said Entwistle had been "brought low by cowards and incompetents".
"I had hoped that George might stay to sort this out. It is a great pity that a talented man has been sacrificed," he said.