Gavyn Davies had mounted a robust defence of the BBC
BBC chairman Gavyn Davies has resigned, following the critical Hutton report into the death of government scientist Dr David Kelly.
Lord Hutton criticised several aspects of the BBC - including its reporting and its management structure.
But he also singled out Mr Davies and his board of governors directly, for criticism of their handling of the row which led to Mr Kelly's death.
The row followed a story by Today correspondent Andrew Gilligan, which quoted an intelligence source as saying a dossier on Iraq's weapons of mass destruction had been "sexed up" by the government. The source was later revealed to be Dr Kelly.
In the subsequent battle with Downing Street which strongly denied the claims, Lord Hutton said the governors had been so concerned with their duty to protect the BBC's impartiality, they had failed to properly investigate the truth of the story.
"The governors were right to take the view that it was their duty to protect the independence of the BBC against attacks by the government," he said.
However, the governors should have realised this was "not incompatible" with giving proper consideration to the government's complaints about Mr Gilligan's report.
Mr Davies had told the Hutton Inquiry the governors had to rely on BBC management to decide if reporter Andrew Gilligan's source was reliable and credible, rather than investigate themselves.
This was understandable but wrong, Lord Hutton said.
"Rather than relying on the assurances of BBC management, I consider that the governors themselves should have made more detailed investigations into the extent to which Mr Gilligan's notes supported his report."
If the governors had investigated, he said, they may have discovered that Mr Gilligan's notes did not back up one of his most serious allegations - that the government had inserted, knowing it to be wrong, a claim into a dossier on Iraq that its weapons could be deployed in 45 minutes.
They would then have questioned whether the broadcast of the "very grave allegation" had been in the public interest, he said.
Mr Davies' resignation generated a mixed reaction.
Conservative MP Boris Johnson told BBC News 24: "The BBC should tough it out."
Labour MP Chris Bryant said: "By going, Gavyn Davies is saying I just happen to be the guy who's going to take the heat on this.
"It doesn't necessarily mean the whole of the BBC should pay for the particular Gilligan crime."