A BBC report wrongly implicating the former Tory treasurer Lord McAlpine in child abuse should never have been broadcast, the corporation’s director general has said.

George Entwistle described the Newsnight report on the North Wales children’s home scandal as “unacceptable” but insisted he should not necessarily have known about it before it was broadcast.

His comments attracted derision from commentators and he was likened to a “man in a pit digging himself even deeper”.

The BBC Trust, Mr Entwistle’s employers, expressed its own horror and ordered the director general to establish why the Newsnight report went so badly wrong.

A Trust spokesman said: “This is a deeply troubling episode. The Trust notes the BBC executive’s apology and would like to offer its own apology also.

“The Trust has impressed upon the director general the need to get to the bottom of this as a matter of the utmost urgency and will expect appropriate action to be taken as quickly as possible.”

The BBC issued an unreserved apology after one of the victims the programme spoke to admitted he wrongly identified Lord McAlpine as his abuser during the 1970s and 1980s.

Although the programme did not name Lord McAlpine, the peer has indicated that he now intends to sue the BBC after it led to him being identified on the internet.

Mr Entwistle told BBC Radio 4’s Today programme he did not see Friday’s Guardian newspaper naming Lord McAlpine because he was making a speech at London’s 21st Public Broadcasters International Conference.

The corporation boss has been accused of showing “an astonishing lack of curiosity”.