A BBC's own review into the decision to appoint Martin Bashir as religious affairs correspondent at the BBC following his Panorama interview with Diana, Princess of Wales found 'no evidence' the journalist was given the job to 'contain and/or cover up' the events surrounding the 1995 programme.
The inquiry was set up to establish the facts around the decision to allow Bashir to return to the BBC in 2016 after being appointed by then Head of BBC News James Harding.
Today's report also says that while then Director General Tony Hall will have known Mr Bashir was being appointed - he did not interfere with the process, Ken MacQuarrie, a longstanding BBC executive who conducted the probe, concluded.
Bashir returned to the corporation five years ago after being appointed despite controversy over his handling of the Diana interview and was forced to resign from MSNBC in 2013 over comments disparaging Sarah Palin.
He was promoted to religion editor in 2018 and handed a 10% pay rise.
Martin Bashir, 58, wore casual clothing and a gloomy expression as he left his £1.7million house in Hampshire earlier this month after
Mr MacQuarrie concluded: 'In my view, the recruitment process for the religious affairs correspondent was targeted at finding the right person for the role. Although there were some shortcomings in the process by which he was re-employed, I am satisfied that he was ultimately appointed because his knowledge and experience were considered to be the best match to the requirements for the role at that time.
He added: 'I have found no evidence that Martin Bashir was re-hired to contain and/or cover up the events surrounding the 1995 Panorama programme. In my view, that theory is entirely unfounded.
'As regards the due diligence conducted on Martin Bashir, the actions of the individuals involved in the recruitment and re-grading of Martin Bashir can only properly be judged against the state of the BBC's corporate understanding as it was in 2016 and not as it stands now in 2021.
'None of the individuals involved in the recruitment of Martin Bashir had knowledge of all of the matters contained in the Dyson Report.
'I have no doubt that if any of the individuals involved in the appointment of Martin Bashir in 2016 had been aware of what is now publicly known as a result of the Dyson Report, Martin Bashir would have never been reappointed to the BBC.'
A recent report by Lord Dyson criticised the methods Bashir used to secure his bombshell interview in 1995, including using fake bank statements.
It came as Tim Davie was ordered to appear before MPs this week to be grilled over the Bashir Panorama scandal.
The new director general will face questions about the broadcaster's handling of investigations into how Bashir, 58, obtained the world exclusive in 1995, in addition to his plans to reform the broadcaster.
A damning report by Lord Dyson recently condemned the methods used by the journalist to secure his interview, including using fake bank statements to encourage Diana's brother Earl Spencer to make introductions.
Former BBC director-generals Lord Hall and Lord Birt will also appear before the Digital, Culture, Media and Sport Committee, in addition to the corporation's chairman Richard Sharp.
Tim Davie (left) will face questions about the broadcaster's handling of investigations into how Martin Bashir, 58,(right) obtained the world exclusive in 1995, in addition to his plans to reform the broadcaster
A damning report by Lord Dyson recently condemned the methods used by Martin Bashir to secure his interview with the Princess of Wales (above) in 1995
Mr Davie has previously 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 added that he has 'no intention' of airing Mr Bashir's infamous interview ever again.
Mr Davie has contacted the royal family to apologise for what happened and is also returning all awards the explosive interview accrued, including a Bafta TV gong won in 1996.
Lord Dyson's report suggested the BBC had failed to uphold 'governance, accountability and scrutiny' with its internal investigation, carried out by Tony Hall in 1996 when he was the managing director of news and current affairs and John Birt was director-general.
Lord Hall was director-general of the BBC from April 2013 to August 2020.
He was among corporation bosses who were attacked by Prince William for 'looking the other way rather than asking tough questions' in the aftermath of the interview.
Last month, the peer quit his Government-backed job as chairman of the National Gallery after he was criticised in Lord Dyson's bombshell report.
Former BBC director-generals Lord Hall (left) and Lord Birt (right) will be questioned by MPs about the events leading up to Martin Bashir's Panorama interview with Princess Diana
Ministers had viewed the Lord Hall's job at the National Gallery as untenable given the museum's close connection to Prince Charles, its royal patron.
Lord Birt, who was director-general of the BBC from 1992 to 2000, was also criticised following the Panorama interview with Diana, recorded without the knowledge of Buckingham Palace.
It emerged in May that an ex-BBC chairman, Prince Charles 'loyalist' Marmaduke Hussey, had immediately attempted to force his resignation.
Ex-BBC chairman Marmaduke Hussey wanted John Birt to quit as director-general over Martin Bashir Panorama debacle
A former BBC chairman tried to force the resignation of the director-general over Princess Diana's interview, it has emerged.
Marmaduke Hussey was horrified by the broadcaster's secret Panorama interview with the Princess of Wales, recorded without the knowledge of Buckingham Palace.
He asked BBC governors to condemn the interview and the conduct of then director-general John Birt and attempted to force his resignation.
Executives did not tell Lord Hussey about the interview until the last minute because they feared he might stop the broadcast. The Tory peer resigned two months later and wrote in his memoir that the episode had 'darkened my last months at the BBC'.
He was known to be a Prince Charles 'loyalist' and had close links to the Royal Family as his wife Lady Susan is a lady-in-waiting to the Queen.
The decision not to tell Lord Hussey, who died in 2006, was discussed in a BBC documentary filmed to mark the tenth anniversary of Diana's interview with journalist Martin Bashir.
Lord Birt told the 2005 BBC2 Arena documentary: '[Hussey] tried to get the governors to condemn the programme, which they refused to do.
'Having failed at that he tried to get the governors to condemn the way in which I had handled the programme and particularly the fact that I hadn't alerted him as chairman. He failed to get what he wanted: a stinging rebuke which, he calculated, would force my resignation.'
The documentary, The Princess and Panorama, was shown to former High Court judge Lord Dyson as part of his investigation into the 1995 interview.
Former judge Lord Dyson's report found the BBC covered up Bashir's 'deceitful behaviour' in obtaining the interview with Diana, and labelled Lord Hall's 1996 internal investigation 'woefully ineffective'.
Bogus bank statements commissioned by Bashir 'deceived and induced' Earl Spencer to help the journalist 'to arrange a meeting with Princess Diana', it said.
His lies landed the Panorama reporter the interview of the century and multiple awards - but hastened the end of Diana's marriage to Prince Charles and saw her stripped of her HRH status just two years before her death.
The BBC made a 'full and unconditional apology' for Bashir's conduct and the subsequent cover-up in May.
Friends of Diana's have claimed she may still be alive today 'if she hadn't spoken to Bashir', who they nicknamed 'The Poison Dwarf' after his betrayal emerged, while Patrick Jephson, the Princess of Wales' private secretary at the time, said a 'line' leads from her interview with Bashir to the night she died in 1997 in a Paris car crash.
In his report, Lord Dyson, who carried out a six-month investigation, said: 'Mr Bashir deceived and induced him [Earl Spencer] to arrange a meeting with Princess Diana.
'By gaining access to Princess Diana in this way, Mr Bashir was able to persuade her to agree to give the interview.
'This behaviour was in serious breach of the 1993 edition of the BBC's Producer Guidelines on straight dealing.'
Lord Hall's subsequent 1996 investigation into claims Diana was hoodwinked by Bashir was 'woefully ineffective', the judge said, especially because their inquiry 'did not scrutinise' Bashir despite knowing he had lied three times about showing the fake bank statements to Earl Spencer.
'Lord Hall could not reasonably have concluded, as he did, that Mr Bashir was an honest and honourable man', the report said.
The BBC had 'without justification' 'covered up' Mr Bashir's tricks and 'thereby fell short of the high standards of integrity and transparency which are its hallmark', said Lord Dyson.
Lord Birt, director-general of the BBC at the time of the interview, said: 'We now know that the BBC harboured a rogue reporter on Panorama who fabricated an elaborate, detailed but wholly false account of his dealings with Earl Spencer and Princess Diana.
'This is a shocking blot on the BBC's enduring commitment to honest journalism, and it is a matter of the greatest regret that it has taken 25 years for the full truth to emerge.
'As the director-general at the time, I offer my deep apologies to Earl Spencer and to all others affected.'
Lord Hall insisted his 'integrity' remained intact despite the criticism and pointed the finger at the shamed journalist, saying he was 'wrong to give Martin Bashir the benefit of the doubt'.
Lord Birt, director-general of the BBC at the time of the interview, said: 'We now know that the BBC harboured a rogue reporter on Panorama who fabricated an elaborate, detailed but wholly false account of his dealings with Earl Spencer and Princess Diana'
He had previously excused Bashir's 'lapse' in having the fake statements produced and declared him an 'honest and honourable man'.
However, Lord Hall has since admitted his 1996 investigation 'fell well short of what was required'.
But a defiant Mr Bashir said in a statement last month: 'This is the second time that I have willingly fully co-operated with an investigation into events more than 25 years ago.
'I apologised then, and I do so again now, over the fact that I asked for bank statements to be mocked up.
'It was a stupid thing to do and was an action I deeply regret. But I absolutely stand by the evidence I gave a quarter of a century ago, and again more recently.'