The BBC began disciplinary proceedings on Tuesday over a news report that wrongly accused a British politician of child sex abuse as it widened the hunt for a new leader to tackle one of the worst crises in its history.
The world's largest broadcasting organisation, which marks its 90th birthday on Wednesday, reportedly wants an outsider for its new director-general who could overhaul an unwieldly management culture.
The "Beeb" is under a pall caused by two programmes -- one smearing Conservative politician Alistair McAlpine, which was broadcast, and another which was shelved but accused late star Jimmy Savile of being a paedophile.
An internal investigation on Monday found "basic" journalistic failures led the flagship show Newsnight to run the story falsely saying that former Tory treasurer McAlpine abused children at a care home in Wales in the 1970s.
The probe into the programme, carried out by the BBC's Scotland director Ken MacQuarrie, "will be used to inform disciplinary proceedings, which will begin immediately," the BBC said in a statement.
The BBC has not yet said who will be punished but it took the unusual step of saying that Peter Johnston, Director of BBC Northern Ireland, had been involved in the decision to run the programme.
The botched Newsnight report and the BBC's response to the Savile scandal has led to calls for a changes to the annual "licence fee" that all Britons with a television must pay, and even a possible break-up of the organisation.
Publicly funded under a Royal Charter, the British Broadcasting Corporation has nearly 23,000 employees and a global audience of around 239 million people, according to the BBC's own figures.
The furore has already claimed the top job at the organisation after director-general George Entwistle resigned on Saturday after just 54 days in the position.
His temporary replacement, Tim Davie, has pledged to "get a grip" of the crisis but the former PepsiCo executive has only been at the BBC for seven years and gave a shaky performance in television interviews on Monday.
The Times newspaper reported that Chris Patten, who heads the BBC Trust, the broadcaster's governing body, wants a new chief who was not a BBC "lifer" like Entwistle.
It mentioned the name of Royal Opera House chief executive Tony Hall.
The current favourite for the job is Ed Richards, head of British broadcasting watchdog Ofcom, at odds of 10/11, followed by Davie on 2/1, former BBC chief operating Caroline Thomson on 5/2 and Hall at 5/1, bookmakers William Hill said.
Other heads have also rolled at the BBC, with head of news Helen Boaden and her deputy Stephen Mitchell being asked to "stand aside" on Monday pending an internal review into the way the claims against Savile were handled by Newsnight.
Police now say they believe Savile abused more than 300 victims over a 40-year period. He died last year at the age of 84.
The BBC has also found itself embroiled in a row over the revelation that Entwistle would receive a £450,000 (565,000-euro, $715,000) payoff -- the equivalent of a year's salary.
Deputy Prime Minister Nick Clegg added to the pressure on Tuesday, telling the BBC that the sum was "hard to justify".
Culture Secretary Maria Miller told parliament on Monday the BBC was facing the "most serious of crises".
Former director-general Mark Thompson, who took up his new job as chief executive of the New York Times on Monday, said he was "very saddened" by the crisis at the BBC.
Thompson took the reins of the BBC in 2004 after another crisis, when his predecessor and the then-chairman resigned following a judge-led inquiry into the death of Iraq weapons inspector David Kelly, which strongly criticised the BBC.
The BBC will on Thursday mark 90 years since its first ever radio broadcast with a three-minute transmission on its domestic radio networks curated by British rocker Damon Albarn.
Nicknamed "Auntie" in Britain, the BBC was established in 1922 by a Royal Charter and now operates eight domestic TV channels, 54 radio stations, its famed World Service and one of the world's most visited websites.