Mr Gilligan's central allegation was "unfounded", Lord Hutton said
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The BBC must strengthen its rules for dealing with big stories and complaints in the wake of Lord Hutton's criticism, a string of commentators have said.
Lord Hutton's report said the BBC's editorial system surrounding a report by Andrew Gilligan was "defective".
Former BBC executive Will Wyatt told BBC News Online it was a "damning criticism of the BBC as a whole".
Conservative leader Michael Howard said the case for independent regulation of the BBC "has never been stronger".
In his report, Lord Hutton said Mr Gilligan should not have been allowed to go ahead with an unscripted report containing an "unfounded" allegation on BBC Radio 4's Today programme.
And BBC managers and governors should have identified that the allegation was not fully supported by Mr Gilligan's notes once a complaint was made, he concluded.
Other figures to recommend BBC changes included Tom Mangold, an ex-BBC journalist and friend of Dr David Kelly, plus former Today editor Rod Liddle and former BBC reporter and government media director Martin Sixsmith.
The corporation has already brought in Mark Byford as deputy director general to improve the way it handles complaints.
Mr Wyatt said: "I think it's important that what other changes the BBC are going to make to their guidelines and activities, they do them quickly and clearly.
"It's essential to look at the guidelines for breaking stories - I understand that's underway. And the complaints system is already under examination, which is good."
He added: "If you're going to accuse the government of deliberately lying to take the country to war, you need to be on firmer ground than the BBC was on.
"[But] I certainly hope it does not stop the BBC from taking on big stories, investigating stories and trying to break news - that's part of what the BBC must do."
Michael Howard called for independent regulation of the BBC, telling the House of Commons governors "cannot both run and regulate the BBC".
Prime Minister Tony Blair responded by saying all issues would be considered in "a thorough review of the [BBC's] Charter".
The BBC's Charter is due to be renewed by the government in 2007.
Mr Mangold described Lord Hutton's criticism as "an earthquake" for the BBC.
He told ITV News that BBC journalism was "the best in the world" 99.9% of the time.
But he added: "They have an absolute duty to get it right.
"I'm glad Hutton has put his finger on the problem - I'm sure the BBC will deal with it rapidly."
Mr Liddle said he thought most people would still think Mr Gilligan's original story on weapons of mass destruction was "fundamentally correct".
But he told Sky News: "The BBC does have to make some organisational changes.
"It has to be very rigorous about the way it does serious journalism of this nature - absolutely no question about that.
Mr Gilligan's original story was "very, very important", Mr Liddle said, and it was "brave of the BBC to do it and brave of the BBC to stick up for its reporter".
Mr Sixsmith said there was now "a very big challenge" for the BBC.
"It does have to take note of the criticism, it has to put in place procedures to make sure that the mistakes which happened over this story don't happen again but it doesn't
have to let itself be neutered by the government," he said.
Another former BBC executive, Richard Ayre, told BBC Five Live governors would now have to give "long and hard thought" to the criticisms levelled against them.
"There will be lessons which the BBC has to learn and will want to learn," added Mr Ayre, a former controller of editorial policy and deputy head of BBC News.
"Today's report from Lord Hutton has been completely unprecedented in its criticism of the way in which the BBC governors performed their duty," he said.