Although Downing Street insisted there was "no gloating", Mr Blair's spokesman said the Cabinet's message was that serious issues, such as Iraqi weapons, should be discussed without impugning politicians' integrity.Some MPs expressed concern that the Government would use its victory to undermine the BBC's editorial independence and put pressure on the rest of the media. But ministers scented blood, with some saying privately that Richard Sambrook, the BBC director of news, should resign or be moved for failing to brief the board of governors properly about Mr Gilligan's report, which Lord Hutton described as "unfounded".At the Cabinet's weekly meeting, ministers congratulated Mr Blair on his vindication by Lord Hutton. Later, Tony Blair and the BBC tried to lower the temperature by promising to "draw a line" under the dispute. Staff also stopped work at 11 BBC regional offices around the UK.After Downing Street raised the stakes by demanding a fuller apology from the BBC, Lord Ryder of Wensum, the acting chairman, said the corporation apologised unreservedly for the allegation by its reporter Andrew Gilligan that Downing Street "sexed up" a dossier on Iraqi weapons. Many BBC staff were angry and demoralised that Lord Hutton's investigation into the death of David Kelly had claimed a second scalp, following Wednesday's resignation of the chairman, Gavyn Davies. After an emotional departure by Mr Dyke, there were spontaneous demonstrations by hundreds of staff who walked out at Broadcasting House and Television Centre in London.

The turmoil at the BBC caused by the Hutton inquiry deepened yesterday when the corporation bowed to pressure from the Government for a full apology and Greg Dyke resigned as director general. The board of governors voted by a margin of two to one to dismiss Mr Dyke, forcing him to stand down. I'm a bit disappointed we haven't challenged enough," he said. The danger now is that it may be impossible in future for the BBC to challenge at all.. Speaking to The Independent two years ago, he admitted he was "a bit disappointed" how few BBC programmes had proved controversial "One of the roles of a broadcaster is to challenge. And as he pointed out: "I'm not here for the money."Some thought he lacked the political sureness of touch that enabled Mr Birt to steer the BBC through the last process of charter renewal in 1996.

But he had the political nous yesterday to realise his presence would make it harder for BBC journalism to rebuild itself.None the less, Stewart Purvis, the former ITN chief executive, admitted yesterday that his friend of more than 20 years had hoped the governors would reject his offer to resign.It will be little consolation to Mr Dyke now to know that he had at least achieved one of his aims. He was on one-year rolling contract to do the job until he was 60, had he and the governors so wished.Although he admitted that he did not enjoy his first year in office, when he landed in trouble for failing to sell an equity stake in Granada and the BBC lost the rights to Premiership matches to ITV, he has since been much more bullish He always thought he had a lot to give. He's got energy and bite and he raised the morale in a way the BBC needed. But he also needed diplomacy and understanding about when to give." And perhaps diplomacy is not his style.He will certainly be bitterly disappointed to be leaving in such a manner. Making Mark Byford deputy director general was a sensible thing to do and, whether it was a cynical thing for charter renewal or not, he resuscitated arts and culture and drama," the source said."But what Hutton has shown is that Greg's got to win 100 per cent, 95 per cent won't do. He invigorated them and got the creative juices flowing and he brought in good people. Certainly his eagerness to chase ratings alarmed many in Government who believed this was not the raison d'?e of the BBC.Yet government insiders insisted yesterday that what had saddened nearly everyone bar Alastair Campbell was that Mr Dyke had been exactly what the BBC required most of the time "He's been an outstanding leader of his troops.

• So far most of these parttime Blofelds have got away with it
• 
• Do we laugh? Perhaps we should laugh a little more
• 
• Gravelle was someone people will really say 'Watch out
• 
• The passengers on the bus were not so lucky
• 
• Unilever shares were up a ha'penny at 525
• 
• Can you let George Martin have the lyrics by 10
• 
• Her novels characteristically veer between magic and satire
• 
• Surely though it must fall within someone's terms of reference
• 
• The excitement is in the election and who can win
• 
• He rightly promoted 24hour news channels and bimedia reporting
•