The BBC was plunged into a fresh crisis last night as boss Tim Davie quit over the broadcaster's bias scandal.
Mr Davie, the corporation's Director General, told staff he had to "take ultimate responsibility" after it was accused of doctoring a speech by Donald Trump.
A scathing 19-page report, written by former journalist Michael Prescott, also revealed an anti-Israel bias in the BBC's coverage of the Gaza war.
Deborah Turness, the CEO of News, also resigned.
Reform UK leader Nigel Farage said the BBC was facing its "last chance" or "vast numbers of people" would refuse to pay the licence fee.
The Reform UK leader said: "Davie and Turness going must be the start of wholesale change.
"The Government needs to appoint somebody with a record of coming in and turning companies and their cultures around. Preferably it would be someone coming in from the private sector who has run a forward-facing business and understands PR.
"This is the BBC's last chance. If they don't get this right, there will be vast numbers of people refusing to pay the licence fee."
Tory leader Kemi Badenoch MP said: "It's right that Tim Davie and Deborah Turness have finally taken responsibility and resigned from the BBC.
"But let's be honest, this has been a catalogue of serious failures that runs far deeper. The Prescott report exposed institutional bias that cannot be swept away with two resignations - strong action must be taken on all the issues it raised.
"The culture at the BBC has not yet changed. BBC Arabic must be brought under urgent control.
"The BBC's US and Middle East coverage needs a full overhaul. And on basic matters of biology, the corporation can no longer allow its output to be shaped by a cabal of ideological activists.
"The new leadership must now deliver genuine reform of the culture of the BBC, top to bottom - because it should not expect the public to keep funding it through a compulsory licence fee unless it can finally demonstrate true impartiality."
Former Home Secretary James Cleverly added: "The BBC's problem was a failure to recognise its own bias.
"I raised this issue with senior BBC management on numerous occasions. Credulous reporting of Hamas propaganda as fact, selective editing of President Trump, not pulling the Bob Villain feed, the rebuke of Martine Croxall, etc etc
"They saw each "mistake" as being in isolation and couldn't or wouldn't see a wider pattern.
"I hope that this episode will trigger a broader look at bias, groupthink, and political fashion within the BBC by the BBC.
"I want the BBC to succeed, it's a powerful British brand, but it needs a proper kick up the a*** for that to happen. Perhaps this is it."
Dennis Reed, Director of Silver Voices, said: "Pensioners will say good riddance.
"He scrapped free licences for the over 75s and arrogantly refused to consider any compromises.
"He has continued to send barrages of threatening letters to older people who can't afford to pay the licence fee. He refused to suspend prosecutions during the pandemic when many other public bodies showed sympathy.
"He has consistently ignored loyal older audiences with an obsessive concentration on the young, who don't want to know. Let's get the BBC back to the job of a trusted national broadcaster."
Former Home Secretary Suella Braverman added: "Now scrap the licence fee".
The BBC is expected on Monday to apologise for the misleading editing of a Donald Trump speech in a Panorama documentary.
The episode, which aired in October 2024, showed Trump telling supporters he would "walk to the Capitol" with them to 'fight like hell' - omitting the words he actually used, pledging to walk with them "peacefully and patriotically to make your voices heard".
Trump's press secretary Karoline Leavitt dismissed the clip as "100 per cent fake news", saying: "This purposefully and dishonestly edited clip by the BBC is further evidence that they are total, 100 per cent fake news that should no longer be worth the time on the television screens of the great people of the United Kingdom."
Both Mr Davie and BBC chairman Samir Shah were warned of the doctored footage in May, it has been alleged.
The decision to issue an apology has raised questions about why it has taken them six months to admit viewers were misled.
The report, by Mr Prescott, accused BBC Arabic of choosing to "minimise Israeli suffering" in the war in Gaza to "paint Israel as the aggressor".
The corporation has had to make 215 corrections since the Gaza war broke out on October 7.
Alan Mendoza, Executive Director of the Henry Jackson Society, said: "The resignations of Tim Davie and Deborah Turness mark a moment of deep crisis for the BBC's credibility.
"The Panorama scandal was not a minor editorial lapse - it was a serious breach of trust that misled audiences on a matter of major political importance.
"Public confidence in the BBC rests on its ability to report fairly and accurately, free from political or ideological bias.
"When that trust is broken, accountability must follow.
"This is not just about journalism, it's about freedom of speech and the health of our democracy.
"A free society depends on honest reporting, not selective editing.
"The BBC must now conduct a full, transparent investigation and show how it will restore integrity to its journalism - because without truth, there can be no genuine freedom of expression, and no public service broadcasting worthy of the name."
Mr Davie told staff: "I wanted to let you know that I have decided to leave the BBC after 20 years.
"This is entirely my decision, and I remain very thankful to the chair and board for their unswerving and unanimous support throughout my entire tenure, including during recent days.
"I am working through exact timings with the board to allow for an orderly transition to a successor over the coming months.
"I have been reflecting on the very intense personal and professional demands of managing this role over many years in these febrile times, combined with the fact that I want to give a successor time to help shape the charter plans they will be delivering.
"In these increasingly polarised times, the BBC is of unique value and speaks to the very best of us.
"It helps make the UK a special place; overwhelmingly kind, tolerant and curious.
"Like all public organisations, the BBC is not perfect, and we must always be open, transparent and accountable.
"While not being the only reason, the current debate around BBC News has understandably contributed to my decision.
"Overall the BBC is delivering well, but there have been some mistakes made and as director-general I have to take ultimate responsibility."
The Board of Deputies of British Jews called for "deep cultural change" at the BBC following the resignation of Mr Davie and Ms Turness.
The community body said in a statement: "The Jewish community has long had profound concerns about the BBC's coverage of the Middle East, but this has sunk to ever greater depths over the last two years.
"The BBC has been hit by scandal after scandal, whether in terms of a Gaza documentary involving the son of a Hamas official, its Glastonbury coverage, the open sore of BBC Arabic, or by continuing to call Hamas what they are - a terrorist organisation. Jewish staff and contractors have also repeatedly complained about their treatment at the corporation.
"In this light, Tim Davie's and Deborah Turness's resignations must be seen as the beginning, rather than the end, of a process of renewal.
"Deep cultural change will be necessary to once again restore trust in one of our nation's most cherished institutions."
Culture Secretary Lisa Nandy: "The BBC is one of our most important national institutions. Every day, it tells the story of who we are - the people, places and communities that make up life across the UK.
"Now more than ever, the need for trusted news and high quality programming is essential to our democratic and cultural life, and our place in the world.
"As a government, we will support the Board as it manages this transition and we will ensure that the Charter Review is the catalyst that helps the BBC to adapt to this new era and secures its role at the heart of national life for decades to come."
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