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News of the crimes by one of the BBC's biggest stars from the 1970s and 80s threw the world-renowned broadcaster into turmoil and sparked allegations that it shut down an expose into Savile in favour of tribute programmes after he died last year.
An inquiry into the scandal has published its findings in a 185-page report, saying it had not found any evidence that senior managers at the BBC applied pressure on the editor of the flagship "Newsnight" programme to drop the expose.
However, it said the decision to halt that investigation was wrong and the subsequent fallout resulted in a state of chaos and confusion. Earlier emailed warnings sent to managers about a "darker side" to Savile were also ignored.
"The Newsnight investigators got the story right," Nick Pollard, the author of the report and a former head of news at rival broadcaster Sky, told reporters.
"They had found clear and compelling evidence that Jimmy Savile was a paedophile. The decision by their editor to drop the original investigation was clearly flawed, though I believe it was done in good faith.
"It was not done to protect the Savile tribute programmes or for any improper reason."
The BBC, celebrating its 90th anniversary, is affectionately known in Britain as "Auntie", and respected around much of the world for its news. But its handling of the Savile affair has rattled staff and audiences who fund the broadcaster through an annual licence fee.
Its Director General George Entwistle stood down after 54 days in the top job after failing to get to grips with the scandal and his predecessor Mark Thompson - now the head of the New York Times - has also faced difficult questions about what he knew.
The inquiry said it accepted Thompson's insistence that he did not know anything about the Savile investigation, a stance which had been queried after evidence suggested he was aware of claims about Savile whilst still at the BBC.
"I have no reason at all for disbelieving Mark Thompson," said Chris Patten, chairman of the BBC Trust, the corporation's governing body.
However, other senior managers were not spared criticism. The BBC said it would appoint a new Newsnight editor while Stephen Mitchell, the deputy director of news, resigned. Three other senior figures were moved to new BBC jobs.
INTEGRITY AND TRUST
Patten said the allegation that Newsnight investigation had been dropped because it clashed with the corporate interests of the broadcaster was extremely serious.
He told reporters the claim "went right to the heart of the BBC's reputation, integrity, and the trust which we depend on. We took the allegations exceptionally seriously."
The accusations against Savile were finally brought to light by rival broadcaster ITV and some 450 people have since come forward with information about to Savile to detectives.
Police believe Savile carried out an unprecedented number of sex offences, and suspect him of involvement in 199 crimes mostly involving children, including 31 rapes.
The report, following a two-month, 2-million-pound inquiry, said one of the most disturbing aspects of the affair was how BBC management failed to communicate properly and respond to serious events.
In 2010, the then head of BBC Events emailed Entwistle to discuss whether the BBC should prepare an obit for Savile at the time of his death, saying "I'd feel v queasy about an obit. I saw the real truth!!!".
A second email to Entwistle referred to the "darker side of the story" of Savile but both warnings were ignored.
The inquiry said it did not regard the email as a "smoking gun" but it indicated that there was "knowledge, not just rumour" within the BBC of the unsavoury side of Savile's character at the time the tribute programmes were planned.
Entwistle, who was at the time the BBC's Controller of Knowledge Commissioning, said he did not recall the email. The review should bring an end to the questions around the Newsnight problems but a separate inquiry is also investigating the corporation's culture and ethics during the Savile era.