The BBC could be doomed unless it makes radical changes, the head of its governing trust has said.
BBC Trust Chairman Chris Patten was speaking after George Entwistle quit as director general to take the blame for the airing of false child sexual abuse allegations against a former politician.
Mr Patten said confidence had to be restored if the publicly-funded corporation was to withstand pressure from rivals, especially Rupert Murdoch's media empire, which would try to take advantage of the turmoil.
"If you're saying, 'Does the BBC need a thorough structural radical overhaul?', then absolutely it does, and that is what we will have to do," Mr Patten, a one-time senior figure in Prime Minister David Cameron's Conservative Party and the last British governor of Hong Kong, told BBC television.
"The basis for the BBC's position in this country is the trust that people have in it," Mr Patten said. "If the BBC loses that, it's over."
Mr Entwistle resigned yesterday, just two months into the job, to take responsibility for the child sexual allegation on the flagship news programme Newsnight.
The witness in the report, who says he suffered sexual abuse at a care home in the late 1970s, said on Friday he had misidentified the politician, Alistair McAlpine.
Newsnight admitted it had not shown the witness a picture of Mr McAlpine, or approached Mr McAlpine for comment before going to air.
Already under pressure after revelations that a long-time star presenter, the late Jimmy Savile, was a paedophile, Mr Entwistle conceded on the BBC morning news that he had not known - or asked - who the alleged abuser was until the name appeared in social media.
The BBC, celebrating its 90th anniversary, is affectionately known in Britain as "Auntie", and respected around much of the world.
But with 22,000 staff working at eight national TV channels, 50 radio stations and an extensive internet operation, critics say it is hampered by a complex and overly bureaucratic and hierarchical management structure.
Journalists said this had become worse under Mr Entwistle's predecessor Mark Thompson, who took over in the wake of the last major crisis to hit the corporation and is set to become chief executive of the New York Times Co tomorrow.
In that instance, both director general and chairman were forced out after the BBC was castigated by a public inquiry over a report alleging government impropriety in the fevered build up to war in Iraq, leading to major organisational changes.
One of the BBC's most prominent figures, Newsnight presenter Jeremy Paxman, said since the Iraq report furore, management had become bloated while cash had been cut from programme budgets.
"He [Entwistle] has been brought low by cowards and incompetents," Mr Paxman said in a statement, echoing a widely-held view that Mr Entwistle was a good man who had been let down by his senior staff.
Mr Cameron appeared ready to give the BBC the benefit of the doubt, believing that "one of the great institutions of this country" could reform and deal with its failings, according to sources in his office.
Mr Patten, who must find a new director general to sort out the mess, agreed that management structures had proved inadequate.
"Apparently decisions about the programme went up through every damned layer of BBC management, bureaucracy, legal checks - and still emerged," he said.
"One of the jokes I made, and actually it wasn't all that funny, when I came to the BBC ... was that there were more senior leaders in the BBC than there were in the Chinese Communist Party."
Mr Patten ruled out resigning himself but other senior jobs are expected to be on the line, while BBC supporters fear investigative journalism will be scaled back.
He said he expected to name Mr Entwistle's successor in weeks, not months.
Among the immediate challenges are threats of litigation.
Mr McAlpine, a close ally of former prime minister Margaret Thatcher, has indicated he will sue for damages.
Claims for compensation are also likely from victims who say Savile, one of the most recognisable personalities on British television in the 1960s, 70s and 80s, sexually abused them as children, sometimes on BBC premises.
Two inquiries are already under way, looking at failures at Newsnight and allegations relating to Savile, both of which could make uncomfortable reading for senior figures.
Police have also launched a major inquiry into Savile's crimes and victims' allegations of a high-profile paedophile ring.