Lord Birt has launched what Andrew Marr described as "pulverising attack" on the BBC over the Gilligan affair.
The former DG is now an adviser to Tony Blair, working at No 10 Downing Street.  He made his comments during a debate in the House of Lords.
Birt said:  "I am troubled to see an institution that I so revere suffer the worst setback in its history.
"At the root of this crisis is a slipshod piece of journalism and, let us be clear, it was not 'mostly right'.
""All organisations make mistakes. The BBC was damaged in this instance above all by its failure to respond properly after the story was broadcasting.
"When the coverage was challenged, it should have been investigated rigorously by BBC executives but, transfixed by outside attack, they did not.
"Rather, we had blind defence and sophistry. We heard the story being supported on the grounds that it was sufficient to report a source, provided that the source was reported accurately, whether or not the story was true.
"The story that was missing in this saga was truth. Absolute truth, whether in journalism or any other sphere, may be unobtainable but we can all recognise journalism that is honestly engaged in the pursuit of truth.
"The central thrust of the story was unfounded. But let us also be clear. The subject of the reporter's inquiry, the government's dossier, was entirely legitimate. It was the treatment of the story that was deeply unsatisfactory.
"Faced with a tip-off on a contentious matter, an experienced journalist tests their sources rigorously. They put the allegations to those involved and painstakingly build up as full as possible a picture.
"Had all this happened in this instance, and had an accurate, fair and contextualised story resulted, it would manifestly have been in the public interest.
"The reason why this did not happen is that the programme itself failed to exercise due editorial scrutiny over its reporter.
"Moreover, when grave allegations are to be made - and especially when there is a risk of libel - the programme's senior editorial staff need to bring into play the organisation's best editorial and legal minds. This did not happen either,"
He seemed to join the chorus of critics who say the affair has highlighted the inadequacy of the system of governance.
"They had failed for too long to act as the BBC's regulators and in the process they had brought into question the institution's 1920s system of governance."
He said Andrew Gilligan's original report was "at odds with the corporation's own high and stated standards that history has set it.  It shouldn't have happened and it shouldn't have been defended."

Hansard, official version of Birt's speech:

"My Lords, I should say at the outset that I am currently the Prime Minister's strategy adviser, on a part-time basis. However, I speak today above all as someone who worked at the BBC for 13 years, and who is deeply troubled to see an institution I so revere suffer the worst setback in its history. I am reassured that the noble Lord, Lord Ryder of Wensum, who is a deeply thoughtful and conscientious person and who I have long known, is holding the reins at this difficult time.

At the root of this crisis was a slipshod piece of journalism. Let us be clear: it was not "mostly right". The central thrust of the story was unfounded. But let us also be clear: the subject of the reporter's inquiry, the Government's dossier, was entirely legitimate. It was the treatment of the story that was deeply unsatisfactory. Faced with a tip-off on a contentious matter, experienced journalists test their sources rigorously. They proceed with watchful scepticism, scrutinising the emerging information from every angle. Through further inquiry, they build up their knowledge. They put the allegations to those involved. Painstakingly, they build up the fullest possible picture.

Had all that happened in this instance, and had an accurate, fair and contextualised story resulted, it would manifestly have been in the public interest. One reason why this did not happen is that the programme itself failed to exercise due editorial scrutiny over its reporter. Moreover, when grave allegations are to be made—and especially when there is a risk of libel—the programme's senior editorial staff need to bring into play the organisation's best editorial and legal minds. That did not happen either.

All organisations make mistakes. But the BBC was damaged in this instance above all by its failure to respond properly after the story was broadcast. When the coverage was challenged, it should have been rigorously investigated by BBC executives. But—
transfixed as they were by outside attack—they did not. Rather, we had blind defence and sophistry. We heard the story being supported on the grounds that it was sufficient to report a source, provided that the source was reported accurately, whether or not the story was true.

Indeed, the word most missing during this saga was "truth". Absolute truth in journalism or in any other sphere may be unattainable, but we can all recognise journalism that is honestly engaged in the pursuit of truth—journalism that is rigorous, fair-minded and questioning; journalism that is committed to getting it right.

When the governors finally became involved, they focused on a key principle—the independence of the BBC. They were right to do so, for the independence of the BBC—we will all agree—is sacred. It has been fought for by boards and directors-general since John Reith successfully resisted Churchill's demand for the government to take over the corporation in the general strike. Of course the BBC must be willing to stand up to the powerful. Of course it must investigate and reveal. But the governors' failure—under fire—was not to focus at the same time on another, equally vital, principle: the need to safeguard the integrity of the BBC's journalism, to try to discover whether the story complained of was actually true.

Last week, the governors finally did act. But they took far too long to exert a grip as the crisis rumbled on. They failed for too long to act as the BBC's regulators—and, in the process, they have brought into question the institution's 1920s system of governance.

The story in question in the form it took was at odds with the corporation's own high and stated standards—the standards that history has set it. It should not have happened, and it should not have been defended. From top to bottom a series of grievous errors was made. And it is those errors that damaged the BBC.

The BBC can and, no doubt, will pick its way out of this dreadful imbroglio. But it can do so only by truly coming to terms with—facing up to—what really happened. For some within—still in denial; understandably shocked, bewildered and confused by the crisis—that will be difficult. But I assure your Lordships that throughout the BBC, at every level, there are many who do appreciate the significance of what occurred, who are deeply committed to journalism of the highest standard.

The powerful "Panorama", put out in the week before the noble and learned Lord, Lord Hutton reported, is one testament to that. It is on the firm foundation of its own best people that the BBC can re-stake its claim to offer journalism of challenge and integrity; can embrace the rigour that goes hand-in-hand with robustness.

Your Lordships' support will be needed, too. The BBC has taken tumbles throughout its history. The institution can be infuriating, even for those of us who have led it! But at its best, the BBC has offered a vital, democracy-enhancing national debating chamber, unique in the world. It has nourished our lively, creative, national culture. It has given space to Britain's most innovative talents to express themselves—and, in the process, to engage, stimulate and entertain us. It has extended all our horizons, delving into our history, opening our eyes to the wonders of the arts and science and nature.

The task of the coming months is to rebuild the BBC's confidence, health and strength; to encourage this great institution—of which the noble Lords, Lord King and Lord Ryder, spoke—to pursue its highest purposes: to restore and revitalise its historic commitment to public service.