The former director general of the BBC Lord Birt has said a "piece of slipshod journalism" was at the root of the corporation's current crisis.
Lord Birt was director general for six years
Lord Birt, speaking in the House of Lords, said the governors had failed to protect the BBC by not acting quickly and not checking for reporting errors.
Speaking in the wake of the Hutton report, he said "grievous errors" had damaged the BBC.
Lord Birt left the BBC in 1999 after six years in the job.
The BBC said it had no comment to make on Lord Birt's remarks.
The Hutton inquiry - which examined events before and after Dr Kelly was named as the source for a BBC report into the government's use of intelligence on Iraq - criticised the BBC over its reporting and management.
It led to the resignations of BBC chairman Gavyn Davies, Director General Greg Dyke and the reporter Andrew Gilligan.
Speaking about journalist Andrew Gilligan's report on weapons of mass destruction on the Today programme, Lord Birt said the story was not "mostly right" as some people have been saying.
And he blamed the governors for not trying to discover whether the story was true because they were transfixed by "outside attacks" and had failed to take a grip of the situation.
"They had failed for too long to act as the BBC's regulators and in the process they had brought into question the institution's 1920s system of governance," he said.
He said the governors had "failed under fire".
Earlier, the acting BBC chairman Lord Ryder, repeated his view that the BBC had been right to apologise for the mistakes highlighted in the Hutton report.
"Most of the mistakes were conceded during the inquiry itself," he told the House of Lords.
Lord Birt said Mr Gilligan's story "in the form it took was at odds with the corporation's own high and stated standards that history has set it"
"It shouldn't have happened and it shouldn't have been defended," he added.
Lord Birt said there had been errors from "top to bottom".
He added that although some staff were "still in denial,
understandably shocked, bewildered and confused by the crisis" the job was now to rebuild the BBC's confidence and "revitalise its historic commitment to public service".
Lord Ryder said that the BBC "must now set its eyes on the future in the
He said: "Recent turbulence has been borne with true professionalism by
He added: "In particular I want to pay tribute to journalists for upholding the highest
standards of objectivity when covering the outcome of the Hutton report."
He told peers: "No other news organisation in the world could have achieved
such balance in reporting itself in the eye of the storm."
He said the BBC had to remain "as an independent organisation that
serves the public above all else".