Epic blunder, but we must not let the BBC self-destruct

The Director General has stepped down, but the broadcaster needs yet more radical surgery

A few days ago, chatting to one of the country's most senior Tories, I was shocked when he asked if I thought the Government should launch a major inquiry into the BBC.

Given the fallout from the Leveson probe into newspapers, which has antagonised the coalition's natural supporters and created a near-insoluble political dilemma over regulation, it seemed an absurd question at the time.

He was taken aback by the force of my reply. The launch of such an inquiry would be politically insane, I said, inflaming issues rather than merely deferring them, as with the misjudged Leveson hearings. It would declare open season on an institution that, for all its many faults, should still be a source of immense pride.

The BBC is an infuriating beast that makes itself hard to defend. It is outrageous that an arm of the state relying on a unique levy called the licence fee uses a tax-dodging device to pay thousands of staff. It overpays its stars, intuitively leans to the left, has a swollen army of useless bureaucrats and suffers from sanctimonious self-reverence.

Yet we would miss it massively if it were not there: the quality of its news, its genuine quest for balance, its cultural reach, its creative daring, its public-service ethos. The more I travel around a fast-changing world covering foreign stories, the more I appreciate what a rare jewel it is, compared with fare on offer elsewhere. Why else is the World Service so precious in so many parts of the planet?

This is what makes its current crisis painful to watch. George Entwistle, a decent man, has done the decent thing by resigning so rapidly as Director General. In truth, he had little option after his humiliating display on yesterday's Today programme, in which he looked both out of touch and out of his depth for the second time in his short tenure at the top. But this does not cure the deep-rooted problems corroding our national broadcaster.

Once again, the BBC has displayed an unerring ability not just to shoot itself in the foot but to machine-gun itself in both legs. The failure to run a Newsnight investigation into predatory sexual behaviour by one of its biggest stars was forgivable. But amid justified outcry, to broadcast an investigation into abuse by a prominent political figure that would shame a student newspaper for its cavalier incompetence was beyond belief.

It is easy to knock investigations when they go wrong – and many of the loudest voices come from critics who have never come close to sniffing a scoop. But this latest Newsnight blunder was one of epic proportions, relying on a freelance outfit and the word of a damaged character not even shown a photograph of his supposed abuser. It removes focus from the real scandal of rampant child torture. And it is indefensible to blame others for naming the victim smeared by their bungling – if there is no privacy on Twitter, the media must adapt to changing technological landscapes.

The subsequent self-lacerating apology on Friday night made for surreal television. Little wonder the masterful presenter Eddie Mair asked: "Is Newsnight toast?". We must hope not. Grill its editors, by all means, but do not burn the show. Despite small audiences and a recent penchant for self-harming, this remains one of Britain's best and most important programmes. More than ever, this is a time when we need genuinely probing journalism, which by its very nature can be contentious.

The future of Newsnight, however, is a minor question compared with wider issues now confronting the BBC. Last month was its 90th birthday, when it was established with what Lord Reith famously called its mission to "inform, educate and entertain". To survive in a multi-channel age when it is losing audience share, it must retain the public's affection and trust. It supplies, after all, nearly two-thirds of news consumed in this country across the entire media. Instead, it has become the latest British institution to crack and crumble, frozen in the glare of lights shone on practices that are no longer acceptable.

The crisis has been a long time in the making. Ever since the BBC tangled with the Blair government over events leading up to the war in Iraq, it has suffered from a crucifying lack of confidence. Its response was stifling layers of compliance officers for comedy programmes, committees laden with highly paid executives terrified of taking decisions and an institutional fear of defending an organisation that is so big and influential mistakes are inevitable.

With each consequent cock-up, the response was buck-passing and cosmetic changes that insulted staff but failed to tackle core problems. After the BBC broadcast misleading footage of the Queen, it ordered veteran producers to take three-hour training courses on how to avoid faking footage. After the Savile scandal broke, makers of long-running shows involving children, such as Outnumbered, were emailed child-protection guidelines, as if that were enough to stop paedophiles like the one the corporation promoted for decades.

It is no longer enough for the BBC to be run by phalanxes of decent people dedicated to the appearance of avoiding disaster. Its credibility is now at stake, embroiled in possibly the gravest crisis it has faced. The most recent BBC survey into public attitudes found that for the first time a majority of respondents do not think Auntie is trustworthy – although, for now, they still take pride in the institution.

There need to be sweeping changes at the top. Lord Patten, chairman of the BBC Trust, has been near-invisible in recent weeks; he should follow Entwistle out of the door after this collapse in confidence among both viewers and staff. But they are far from the only guilty parties; a board comprising the most senior editors cleared that disastrous Newsnight programme.

They must be replaced by people tough enough to enforce real reform, take responsibility for their actions and defend the institution with vigour. Not office politicians who have climbed the internal tree without trace, but substantial media figures tested outside the corporation. Marjorie Scardino, who is leaving Pearson, Andreas Whittam Smith, the former Independent editor, and Andrew Neil, my pugnacious former boss at The Sunday Times, are three who come instantly to mind.

No one should be under any doubt over the gravity of this crisis. It comes as the BBC is under challenge as never before from commercial rivals, political enemies and technological change. With each blundering step, it only makes matters worse. The days of Reith may be long gone, but it remains too powerful and too precious an institution to be allowed to destroy itself in this manner.