Peter Fincham, the Controller of BBC One, resigned yesterday after the publication of a damning report outlining a litany of errors that led him to release inaccurately edited footage of the Queen.

Following him was Stephen Lambert, the producer of the footage, which purported to show the Queen storming out of a photoshoot when she was actually walking in. Accused of “cavalier” editing, Mr Lambert was forced to quit his job as chief creative officer of RDF Media — the production company also behind Faking It.

A three-month inquiry by Will Wyatt, a former senior BBC executive, concluded that the incident revealed “misjudgments, poor practice and ineffective systems”, with BBC employees described as “naive” although nobody “consciously set out to defame or misrepresent the Queen”.

The departure of Mr Fincham, who had served for only two years in the role, leaves Britain’s most popular channel without a leader. It triggers a selection race at time when the BBC is mired in editorial controversies arising from faked winners of phone-ins on Children in Need, Comic Relief and Blue Peter.

His acting replacement, Roly Keating, the Controller of BBC Two, was installed yesterday as the favourite to get the job after the experiment of bringing in an outsider to the corporation ended in failure. Mr Fincham joined the BBC from Talkback, the independent producer that he had sold in 2000, in a deal that made him £12 million.

The former controller was not personally criticised in the inquiry, but he had little choice to go because he had presided over a team that failed to check the accuracy of the footage before releasing it to the media, did not realise the news value of what it was releasing and did not correct the error quickly enough.

On July 11 Mr Fincham held a press conference to advertise the BBC’s autumn season. He highlighted a fly-on-the-wall documentary, A Year with the Queen, and showed a clip that apparently showed her walking out of the photoshoot with the celebrity photographer Annie Leibovtiz.

Leibovitz suggested that the Queen remove the crown that she was wearing to look “less dressy”, to which the Queen replied “Less dressy! What do you think this is?”

That cut away to an image of the Queen walking out, when in fact what had happened was that “she paused, she chuckled and carried on with the photoshoot”.

Yet, at the time, Mr Fincham said that the Queen walked out “in a bit of a huff” — although at no point before airing the clip was he aware that the edit provided was misleading.

Will Wyatt’s analysis shows how chaotically the BBC responded as it became clear that the Queen had been misrepresented that evening. Nobody bothered to inform Mark Thompson, the Director-General, although “he should have been”.

Mr Fincham agreed to an apology with Buckingham Palace by 9.44pm, but both the broadcaster and the royal officials agreed to hold the statement over to the next day to “check the temperature of the story”. This decision meant that it appeared unchallenged in every leading newspaper in the morning, making the inevitable climbdown — when an apology was finally issued at 11.54am — all the more embarrassing.

Once Mr Fincham had read the document, delivered privately to the BBC this week, he concluded that he had no option but to quit. His resignation letter, sent yesterday, said: “It is with very great regret that I have concluded, following Will Wyatt’s report, that I should resign as controller of BBC One”.

Mr Thompson said in his letter to Mr Fincham that he accepted the decision “with great sadness”. Accepting the report, he said that the BBC would tighten its procedures in dealing with independent producers, the Palace, and in the release of promotional material.

However, far more damning criticism was reserved for Mr Lambert. It was he who, as far back as April, actually reversed the actual order of the footage of the Queen in a promotional video designed to whet the appetite of “co-investors”. That was described as a “cavalier way of treating any footage”. Although inaccurate, that material was sent to the company producing the promotional video for the BBC season launch, and it was released.

Mr Lambert was the creative force behind RDF Media, and until the furore had been one of the most succesful independent television producers in Britain. His company was behind TV hits such as Wife Swap and Location, Location, Location. Last year he earned £418,000 and owns 6.6 per cent of the company, but as a result of the scandal its share price has been hit and it is now under threat of a takeover from Endemol.

The producer issued a lengthy apology, saying that his action “which I accept in the words of the inquiry was ‘cavalier’, was the first in a chain of carelessness and misunderstandings that had very serious consequences”. RDF declined to say whether he would get a payoff.

Minor characters in the crisis were also criticised. The Palace came across as slow to react to the problem, as did Mr Fincham's immediate superior, Jana Bennett, the BBC’s Director of Vision, who is described as showing “a lack of curiosity” in finding out what had gone wrong.

The contenders

1 Roly Keating, Controller of BBC Two
Running BBC One on an acting basis and, with such hits as The Apprentice under his belt, he could easily take on the job full time. A more serious tone could well be what the BBC will want after the freewheeling Fincham era. Keating is likely to have several months to show what he can do

2 Peter Bazalgette, former chief creative officer, Endemol
The man who helped to bring Big Brother to Britain is looking for a job after quitting the producer Endemol when it was taken over. Although best known for downmarket reality programmes, “Baz’s” intellect is widely respected. But the BBC may fight shy of another independent producer not steeped in BBC values

3 Kevin Lygo, director of TV and content, Channel 4
A year ago Lygo was the hottest property in British broadcasting, after bringing Channel 4 the best rating performances among TV channels in 2005 and 2006. He has endured a torrid 2007. An interest in Islamic art hints at a serious, BBC-like sensibility but remarks about this winter’s Celebrity Big Brother row may convince the BBC he is gaffe-prone

4 Jane Tranter, Controller of Fiction, BBC
One of the corporation’s hottest up-and-coming executives. Helped to revive its reputation for drama, with such period pieces as Jane Eyre and the slick modern fare of Life on Mars. Now a “super-commissioner”, a channel controller’s job is surely next — although drama commissioners often find the step up difficult

5 Alison Sharman, director of factual and daytime, ITV1
Signed Alan Titchmarsh for a forthcoming daytime chat show and has been battling to revive ITV1’s daytime output. Poached from the same job at the BBC two years ago, she has been controversial, moving children’s programming out of the schedule. But her stint at ITV gives her the mass commercial experience that the BBC could welcome

6 Jane Root, general manager, Discovery Channel
Former Controller of BBC Two who commissioned Simon Schama’s History of Britain. Has been careful to maintain her British profile after heading to the United States.

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