The BBC, reeling from revelations that a former star presenter was a paedophile, brought further problems on its head when a flagship news programme, Newsnight, aired a mistaken allegation that a former top politician sexually abused children.
The broadcaster issued a full apology on Friday, but on Saturday Entwistle 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 a previous scandal involving the same programme.
In his resignation letter, Entwistle said the unacceptable journalistic standards of the Newsnight film had damaged the public's confidence in the 90-year-old BBC.
Lord Patten, chairman of the BBC's governing body and long a prominent figure in British politics, said it was one of the "saddest nights" of his public life to accept Entwistle's resignation.
"George has very honourably offered us his resignation because of the unacceptable mistakes and the unacceptable shoddy journalism which has caused so much controversy," said Patten.
"He has behaved as editor with huge honour and courage and would that the rest of the world always behaved the same."
Patten announced that Tim Davie, the BBC's director of Audio and Music, would be the acting director general.
Some commentators have said the hierarchical management of the 22,000-strong organisation left it unable to respond to large-scale problems and criticism.
Tim Davie
Tim Davie (born 1967) is a BBC executive. As of 10 November 2012, he is acting Director-General of the BBC following George Entwistle's resignation.
He will hold this position while the BBC search for a permanent candidate to fulfill the role.
His permanent role is currently the BBC's Director of Audio & Music, but has been named as the Chief Executive Officer of BBC Worldwide, and will assume that role on 1 December 2012.
He joined the BBC in April 2005.
As Director of Audio & Music, he sat on the BBC's Executive Board with overall responsibility for all of the BBC's national radio networks and the corporation's music output across all media. This included BBC Radio 1, BBC Radio 2, BBC Radio 3 and BBC Radio 4; as well as the BBC digital radio stations BBC Asian Network, BBC Radio 1Xtra, BBC Radio 6 Music and BBC 7; the three BBC Orchestras based in England; and The Proms. He also heads up programme making teams across radio and music television. BBC Audio and Music has an annual programming budget of c.£200 million and a staff of over 1,400.