UPDATE 1-BBC director general resigns over "shoddy journalism"
* BBC director general quits two months into job
* BBC chairman denounces shoddy journalism
LONDON, Nov 10 (Reuters) - BBC Director General George Entwistle resigned on Saturday, just two months into the job, after the state-funded broadcaster put out a programme denounced by the corporation's chairman as shoddy journalism.
The BBC, reeling from revelations that one of its former stars was a paedophile, brought further problems on its head when a flagship news programme aired a mistaken allegation that a former senior politician sexually abused children.
The BBC had already issued a full apology on Friday, but on Saturday its director general had to admit under questioning from his own journalists that he had not known in advance about the Newsnight report, weeks after being accused of being too hands-off over the previous scandal on the same programme.
Accepting Entwistle's resignation, BBC Trust chairman Lord Patten said: "This is undoubtedly one of the saddest evenings of my public life.
"At the heart of the BBC is its role as a trusted global news organisation.
"As the editor-in-chief of that organisation, George has very honourably offered us his resignation because of the unacceptable mistakes -- the unacceptable shoddy journalism -- which has caused us so much controversy."
Entwistle quit after strong criticism over the Newsnight programme.
"I listened to the director general with increasing disbelief," John Whittingdale, chairman of parliament's powerful media committee, told Reuters. "The level of failure of management at every level within the BBC, up to and including the director general, is just extraordinary."
The BBC and its bosses have been under huge pressure since a rival broadcaster carried charges last month that the late Jimmy Savile, one of the most recognisable personalities on British television in the 1970s and 80s, was a prolific sex offender.
Suggestions have surfaced of a paedophile ring inside the broadcaster at the time and a BBC cover-up. To complicate matters for Entwistle, Newsnight pulled a planned expose of Savile shortly after his death last year, and the BBC went ahead with tribute shows.
Having been widely criticised for not broadcasting that expose, which led to its editor stepping aside, Newsnight is now being lambasted for its Nov. 2 report on sexual abuse at children's care homes in North Wales during the 1970s.
Steve Messham, a witness, told Newsnight that a senior Conservative had raped him when he was a child in one of the homes.
Newsnight did not identify the politician, but the name of Alistair McAlpine, Conservative Party treasurer from 1975 to 1990 during Margaret Thatcher's premiership, quickly appeared on the Internet and social media sites.
On Friday, McAlpine went public to rigorously deny the allegations and threaten legal action.
Hours later, Messham said he had misidentified McAlpine to Newsnight. The programme admitted it had not approached McAlpine for a comment, or shown Messham a picture of McAlpine, before airing the report.
Castigated for what he agreed was a slow response to the Savile disclosures, Entwistle demanded a report on the incident by Sunday and suspended all Newsnight investigations.
The erroneous Newsnight report had been cleared by senior managers and lawyers, and commentators queried why Entwistle had been kept in the dark in the wake of the furore over Savile.