Lord Hutton's verdict on the BBC has left the corporation facing a serious crisis, today's papers conclude.

In exonerating the government and castigating the BBC for its reporting and handling of the Andrew Gilligan story, Lord Hutton found failings at every level of the organisation.

"The allegations . . . that the government probably knew the 45-minutes claim was wrong or questionable . . . were unfounded," he said.

Announcing his resignation, chairman of the governors Gavyn Davies said: "There is an honourable tradition in British public life that those charged with authority at the top of an organisation should accept responsibility for what happens in that organisation."

Greg Dyke, the director-general, struck a more defiant tone.

"The dossier raised issues of great public interest. Dr Kelly was a credible source," he said.

"Provided his allegations were reported accurately, the public in a modern democracy had a right to be made aware of them. The greater part of the BBC's coverage of the dossier fulfilled this purpose."

Tessa Jowell will next week begin the hunt for a new BBC chairman.

The culture secretary last night announced that Lord Ryder, a former Conservative chief whip who is BBC vice-chairman, would hold the fort until a permanent replacement could be found.

"It will be for the new chairman to take forward the lessons of Lord Hutton's report," she said.