George Entwistle wanted more than £450,000 to go, says Lord Patten

The BBC Trust chairman told MPs that Mr Entwistle wanted more than 12 months’ salary to resign – despite being entitled contractually to only half that amount.

Appearing before the Commons culture, media and sport committee, Lord Patten insisted the settlement was “better than any other course of action”, amid fears of an unfair dismissal claim.

Mr Entwistle was forced to quit after just 54 days in the job after BBC2’s Newsnight wrongly implicated Lord McAlpine in a child abuse scandal – leading to a £185,000 pay-out.

He had come under fire for the corporation’s response to the Jimmy Savile abuse scandal, including his own decision to run tribute programmes to the late DJ last Christmas, even though he knew Savile was the subject of an earlier Newsnight investigation.

Last week, it emerged Mr Entwistle insisted on a full  12 months’ salary as he left, as well as receiving £35,000 for legal expenses, £10,000 for public relations and 12 months’ private medical cover.

But Lord Patten, who appeared alongside acting director-general Tim Davie, told MPs that by striking a deal he had avoided potentially paying out even more in constructive or unfair dismissal claims.

Describing his last phone conversation with Mr Entwistle, Lord Patten said he told him: “We are not urging you to go, but we are not urging you to stay.”

He said: “I then got a call that evening from him and from the head of human resources, that he wanted to go and wanted to go with 12 months or more.”

He went to New Broadcasting House and was told Mr Entwistle would agree to a “consensual termination of his contract”, but “would not accept departure on six months and wanted to go on 12 months or more”.

Lord Patten added: “£450,000 is one hell of a lot of money. The idea that I did not understand how politically difficult it would be suggests a degree of political innocence on my part, which I have to tell you does not exist. But the options I had were absolutely clear.”

Constructive dismissal was “implied” in all negotiations, Lord Patten said, adding: “If we wanted him to go quickly without a fuss in a way that was co-operative, then those were the terms, otherwise employment legislation may take effect.”

He said he discussed with solicitors Baker & McKenzie how he would defend the decision: “Their agreement was not only is it defensible, but it is better than any other course of action, unless we wanted the BBC to drift on without somebody at the top.

“What did we get in return? First of all, we got a settlement that was less than we would have got had we gone through constructive dismissal.

“Secondly, we got a warranty from Mr Entwistle that if Pollard [review] or anything else finds that he has done anything which is in breach of his contract or the BBC disciplinary guidelines, we can claw back some of the remunerations that has been paid.”

Lord Patten also told MPs that the BBC and its licence payers would have to “bear the costs” of inquiries ordered in the wake of the Jimmy Savile scandal, “however much they are”.

The Pollard Review, examining the shelved Newsnight report into Savile’s abuse, is expected to be completed by Christmas.