The BBC has been heavily criticised by an inquiry into its decision to drop an investigative programme on allegations of sexual abuse of women and children by late Jimmy Savile, once one of its most pampered celebrity performers.

The inquiry held that the decision was ``seriously flawed’’ but rejected allegations of a ``cover-up’’.

The deputy director of news Stephen Mitchell, one of the most high-profile figures to be slammed by the inquiry, resigned rejecting the criticism leveled against him.

The inquiry said the way the decision not to telecast the Savile programme was taken was ``wrong’’ but it was ``done in good faith’’.

It had been alleged that the programme was axed at the last minute to avoid a clash with BBC’s Christmas tribute to Savile — two months after his death last October.

"The decision to drop the original investigation was flawed and the way it was taken was wrong but I believe it was done in good faith. It was not done to protect the Savile tribute programmes or for any improper reason," said Nick Pollard, Sky’s former head of news, who led the inquiry.

The programme , based on the testimonies of Savile’s victims, was commissioned by Newsnight, BBC’s flagship current affairs programme and its findings have since been vindicated with the police investigating hundreds of cases of alleged child abuse by Savile.

The inquiry report was critical of BBC’s the top-down and compartmentalized decision-making process which often resulted in the bosses not knowing what was happening right under their noses.

However, the BBC claimed vindication that the report did not find any evidence of a cover-up. Its acting director general Tim Davie said he was "pleased to say that the review found no evidence of any improper pressure to prevent the broadcast of the Newsnight investigation or to protect the Jimmy Savile tribute programmes".

Chris Patten, chairman of the BBC Trust, said it accepted the report in its ``entirety’’.

Culture Secretary Maria Miller said the report raised "serious questions around editorial and management issues at the BBC", and urged the to "help tackle these".

Meanwhile, the Trust also released the findings of its review into the BBC’s handling of a report falsely implicating a former adviser to the former Tory Prime Minister, Margaret Thatcher, in a child abuse scandal. The row led to the resignation of its then director general George Entwistle who had been in his post for just 54 days. The Trust said there had been a failure by the programme's team to follow the BBC's own editorial guidelines

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