The broadcaster’s boss said he does not yet know why Mr Bashir was re-hired in 2016 but that a “quick” investigation is under way and findings are expected to be published next week.
Mr Davie was speaking following the publication of Lord Dyson’s report, which criticised the methods Mr Bashir used to secure his bombshell 1995 Panorama interview with Diana, Princess of Wales, including using fake bank statements.
The report also suggested the BBC had failed to uphold “governance, accountability and scrutiny”.
Asked about Mr Bashir’s re-hiring in 2016, Mr Davie told BBC Radio 4’s Today programme: “We’re interviewing people, getting the documents, and we should be able to publish something next week.”
Mr Davie added: “There’s no doubt with what you know now – it’s a big mistake.”
Asked if Mr Bashir is still being paid, Mr Davie said: “He’s working out a short notice period because he resigned, and that’s where we are now.”
The director-general said this notice period started the moment Mr Bashir resigned, and is almost up.
In his report, Lord Dyson, a former Master of the Rolls, said journalist Mr Bashir used “deceitful conduct” to obtain the 1995 interview with the princess, which was then covered up by a “woefully ineffective” internal investigation in 1996.
Mr Davie also reflected on the “shocking” way in which whistleblowers were treated regarding the interview, saying he would like to meet graphic designer Matt Wiessler.
Mr Wiessler had tried to expose Mr Bashir’s methods and complained that he had been sidelined after raising concerns that fake bank statements he mocked up for Mr Bashir had been used by the journalist to persuade Diana to do the interview.
Mr Davie told the Today programme: “I think some of the most disappointing and shocking elements of this, and there are multiple failings which we have apologised for, are things like the whistleblowing, how did that work?
“The very person who raised this – and I know many staff feel very strongly about this – the very person who raised this as an issue, suffered enormous impacts, which we’re very sorry for. That cannot happen again. We have improved processes but I want to look again at things.”
The corporation had said last week that it accepted the findings of the report “in full” and Mr Davie told Today he reiterated a “full, unconditional apology” to Mr Wiessler.
It was put to Mr Davie on the programme that Mr Wiessler wants to meet him and he was asked if he would.
He replied: “Absolutely. Absolutely. And I would like to meet him. I think we need to engage with people, talk with them, and the apology’s fulsome.
“I feel shocked.”
Asked if he thinks the BBC owes Mr Wiessler compensation, Mr Davie said it needs to go through a “legal discussion”, adding: “We’ll engage in that discussion because clearly we were at fault.”
He said that reform at the BBC needs to continue “at pace” at the corporation, saying the organisation had made changes since 1995.
“We’ve had a number of new editorial guidelines going through the system. And I have say I’m very proud of the BBC today and how it operates,” he said.
“But I think you have to reflect on this. It was very, very serious.”
Mr Davie said he has “no intention” of airing Mr Bashir’s interview with Diana ever again.
Pushed on whether he meant never any aspect of it, he said: “I think we need to discuss clips and reflect on that.”
Mr Davie added: “My view is you cannot now look at this interview free from the context in which it was secured.”
He was asked if the BBC accepts that there was a direct line between the forged documents, what Mr Bashir did, and Diana dying.
He replied: “I think we fully accept the Dyson report. I think beyond that, Justin (Webb), we are into speculation, and that’s where I am.”
It was put to Mr Davie that what he is saying is that he does not accept a direct line, and he said: “I haven’t got the evidence of that, Justin. It’s as simple as that. It’s not a question of rejecting it.
“It’s just simply I’m driven by the evidence in the Dyson report. And I think that’s a fair reading of what I’ve got in front of me.”
Chairman of the Digital, Culture, Media and Sport Select Committee Julian Knight responded to Mr Davie’s interview, tweeting: “Just listening to BBC Tim Davey on Radio 4 Today. I think he struck the right note particularly when it came to the approach to whistleblowing. I and the committee look forward to the report being issued imminently into the scandalous rehiring of Mr Bashir.”
On Wednesday, the BBC board announced that it will launch a review into the effectiveness of the broadcaster’s editorial policies and governance following the Dyson report.
In a statement, the BBC board admitted the failings set out in the 127-page document and said it hopes to ensure the “mistakes of the past” are not repeated.
It said: “We accepted Lord Dyson’s findings in full and reiterate the apology we have offered to all those affected by the failings identified.
“We recognise the impact that the events it describes has had on so many people, not least those whose lives were personally affected by what happened.
“We also acknowledge that audiences had a right to expect better from the BBC.”
The Digital, Culture, Media and Sport Committee also announced that it will hold a session, expected to be in June, to examine questions raised by the report.