Dyke and team face threat to charter

In the upper corridors of the BBC hierarchy, realisation has finally dawned that the wind of change is about to become Hurricane Hutton.

The leaked extracts are devastating for the corporation and damning for reporter Andrew Gilligan and his bosses.

"I consider the editorial system which the BBC permitted was defective," the judge decides.

He says the broadcasters were "at fault" for failing to vet Gilligan's story properly and for failing to investigate his charges after being deluged with complaints from No 10.

Richard Sambrook, the director of news, is singled out for launching a gung-ho counter-attack without properly checking the facts first.

The judge's criticisms centre on an exchange of letters between the BBC and No 10 after Gilligan's explosive broadcast on 29 May in which he first alleged the Government "sexed up" the Iraq dossier.

"The BBC failed, before Richard Sambrook wrote his letter on 27 June to Alastair Campbell, to make an examination of Mr Gilligan's notes to see if they supported the allegations-which he had made," the report states. "The BBC management failed to appreciate that the notes did not fully support the most serious of the allegations in the 6.07 broadcast."

And the BBC governors, who were wheeled out to support the corporation in its fight with No 10, are also lambasted. "The governors are to be criticised for failing to make a more detailed investigation in whether the allegation by Andrew Gilligan was properly supported by his notes and failing to give proper consideration to whether the BBC should publicly acknowledge that this very grave allegation should not have been broadcast."

Only a month ago, chairman Gavyn Davies declared bullishly that no more reforms were planned in the wake of the David Kelly affair.

Today there is a growing recognition that Auntie Beeb cannot amble on in the same way. "Gavyn said there would be no sackings but that's not how things now look," said one corporation insider.

Of all the failings revealed in the Hutton hearings, the BBC's were probably the most clear cut. The Today editor Kevin Marsh aired the story that the Government "sexed up" its Iraq dossier without apparently realising how controversial it would be. Gilligan blurted out the charge that "the Government probably knew the 45-minute claim was wrong". Downing Street's denial of the allegations was duly reported but not taken too seriously. Marsh glibly dismissed Alastair Campbell as "on the run. Or gone bonkers. Or both".

The BBC had begun to doubt the accuracy of Gilligan's report long before it admitted its mistakes. Although Marsh defended the story at first as "not in any way false", by 27 June he was worried enough to write an email about "my worst fears - based on what I am hearing from the spooks". Yet the very same day Sambrook defended the story in a nine-page letter to Alastair Campbell, which Lord Hutton says should not have been sent without proper checks.

Sambrook was satisfied with Gilligan's account but he failed to read the reporter's notes, which would have revealed Dr Kelly had not actually accused the Government of knowing the intelligence was wrong.

A siege mentality gripped the corporation. Davies saw the row as a test of the BBC's independence. Dyke admits he ignored the row for "several weeks" but finally got involved, saying: "Have we got this f***ing right? Because if we haven't we'd better go back on it right now!"

By herding the governors into the front line, the BBC may have made another mistake. The governors, by failing to get anywhere near the truth, lost authority. Curiously, the BBC says its governors are not even holding a special meeting to discuss today's report - an early sign, perhaps, that they feel their fingers have been burned enough. But if heads are going to roll, whose will they be?

Gilligan will not return to the Today programme, say colleagues. Marsh, who oversaw the story, might be vulnerable. Sambrook had the greatest responsibility for checking the facts. Both Davies and Dyke accepted the advice of others instead of ordering an investigation run from outside the news department.

Perhaps the biggest casualty will be the BBC's cherished and chartered right to self-regulation. If so, the very independence it sought to protect will be weakened after all.