The Prime Minister and Culture Secretary have criticised the £450,000 pay-off given to George Entwistle, calling it "hard to justify", as the BBC saw senior news staff sidelined in the ongoing crisis.
The former director-general, who resigned on Saturday, has been awarded a full-year's pay after bowing out only 54 days into his reign, despite normally being entitled to only half that figure.
But BBC Trust chairman Lord Patten defended the sum, saying it was "justified and necessary" to allow a clean break and avoid lengthy delays. The settlement was discussed in Parliament in a further day of drama which saw two senior figures - BBC director of news Helen Boaden and her deputy Stephen Mitchell - step aside from their posts temporarily.
The corporation also put in place a new "chain of command" to oversee all of its news output in the wake of a botched Newsnight report broadcast on November 2 which, in addition to his handling of the Jimmy Savile scandal, led to Mr Entwistle's downfall.
Acting director-general Tim Davie began trying to regain confidence in the broadcaster and said his role was "to get a grip of the situation". And he pledged to personally apologise to Lord McAlpine who was mistakenly implicated in a sex abuse scandal in the bungled Newsnight broadcast.
Mr Entwistle stepped down at the weekend after a dismal display as he tried to defend his leadership of the corporation. He has been given 12 months' pay - the amount he could have expected if he was sacked - rather than the six-month figure he was entitled to under his contract. The extra money is equivalent to the income from 1,546 licence fees.
In the House of Commons, Culture Secretary Maria Miller described it as a "reward for failure" but said ultimately it was a matter for the BBC Trust to decide the figure.
Earlier, it was announced Ms Boaden and Mr Mitchell had stepped aside, although the BBC said this was not as a result of the Newsnight programme this month. Instead, they were in response to the "lack of clarity" surrounding who is in charge while the Pollard Review is making its inquiries. This review - led by former Sky News chief Nick Pollard - is looking into an earlier decision to shelve a Newsnight investigation into Savile's sexual abuse.
Iain Overton has also resigned as editor of the Bureau of Investigative Journalism over its involvement with the Newsnight programme which broadcast allegations linking a senior Tory to child abuse. Overton had tweeted before the start of the programme that Newsnight would feature an item, which the BIJ worked on, about a "senior political figure" who was said to be a paedophile.
The BBC's head of news gathering, Fran Unsworth, and Ceri Thomas, the editor of the Radio 4 Today programme, are to fill in for Ms Boaden and Mr Mitchell temporarily. Karen O'Connor - a former deputy editor of Panorama and Newsnight - has also been drafted in as acting editor of Newsnight. The BBC also announced it was overhauling the "chain of command" in news in response to a report by the director of BBC Scotland into the failings of the recent botched Newsnight programme.
