The Pollard Review, carried out by former head of Sky News Nick Pollard, was set up to look into "whether there were any failings in the BBC’s management of the relevant investigation".
The report concluded that the decision by editor Peter Rippon was "seriously flawed", but was not a result of "undue pressure" from his managers.
In the report, published today, Pollard said that "while there clearly were discussions about the Savile story between Mr Rippon and his managers, Mr [Stephen] Mitchell and Ms [Helen] Boaden, I do not believe either of them exerted undue pressure on him".
"Mr Rippon has told us that the decision to drop the Savile story was his, and his alone. I accept that the final decision was his. However, his decision was clearly influenced by his two managers."
In his recommendations Pollard adds that "the BBC’s news and editorial management needs to be reviewed" and he also questions "whether the Director General's status as 'editor-in-chief' is of continuing utility".
As part of the review Pollard was also asked by the BBC Trust to "investigate how inaccuracies appeared in a blog about the investigation and how the corrections to that blog were handled".
Pollard said preparation of the blog post "can only be described as chaotic". The final document was "flawed", he added, and "not a full and completely frank account of the decision-making process".
However, Pollard said, the post "was relied upon by the BBC Corporate Press Office as a 'thorough picture of what had happened on the programme'".
Following publication of the blog post on 2 October others raised "serious cause for concern" about the accuracy of some of the comments within the blog post, and 20 days later a correction was published on the same blog.
Pollard said the incident had demonstrated "significant failings in the managerial oversight of Mr Rippon's blog".
"These were clearly very challenging times in the BBC: but it is in those times that leadership is required.
"It is clear that the BBC was thrown into disarray by the errors in the blog and had no structure in place to deal with them. What is marked, however, is both the time it took for the errors to be addressed and the fact that, for some time at least, no one individual fully stepped up and took responsibility for the issue.
"I am, in this context, critical of Mr Entwistle, who became aware of issues with the blog at an early stage and who, while not inactive, appears to have taken a long time to take any real control of the issues."
He recommended that "the BBC needs to decide what their blogs are for, particularly Editor’s blogs".
"Are they a true journalistic outlet, in which case they must meet BBC editorial standards and the Press Office should not be involved with them. Or are they a public information device? If so, that needs to be made clear to those writing them, approving them and reading them.
"Do they get many readers? Are they more trouble than they’re worth? I have some doubts as to whether they are genuinely a useful tool for accountability."
The BBC Trust and executive board have said they accept all the recommendations in the report.
The BBC executive board added that " the report makes uncomfortable reading" and "raises basic questions about how we work, communicate and make decisions as an organisation".
It has also announced a number of "immediate changes" including the replacement of "the senior editorial team for Newsnight" with a new editor and deputy editor.
It added that "the handling of the Savile blog was inappropriate" and that the role of the blog "will be reviewed and entries will comply with the BBC’s editorial standards".
In a statement published by the Guardian, Rippon said he "will learn lessons from what has happened", but added that he does not agree "that my decision on this occasion was flawed".
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