Campbell, who was addressing MPs, said that if the pictures were fakes Morgan had no choice but to go.
"If it transpires that these pictures are fake, staged, a hoax -- then I don't honestly see how his position is tenable," Campbell said.
He dismissed Morgan's plea that the pictures pointed to a much bigger story of the abuse they had exposed despite being fakes.
"This idea that something illustrates a broader point and is therefore justified -- when you think of the huge damage it has done around the world and particularly the Middle East -- is completely unjustified," he said.
Campbell was speaking to a committee of MPs who are heading up the inquiry into government communications.
He said what the Mirror had done was a case of fusing news and comment together and said he believed when the soldiers first came to the paper they had not got pictures.
"If those pictures are genuine it is reasonable to present them in the way they were presented. If, on the other hand, they were not genuine and staged for political or commercial reasons, then that is unacceptable," he told the Public Administration Select Committee.
The Special Investigations Branch of the Royal Military Police has told defence secretary Geoff Hoon that the Bedford MK truck at the centre of the pictures matches one at the Queen's Lancashire Regiment HQ in Kimberley Barracks in Preston, Lancashire.
The Army was saying today that the SIB has now found a logbook which it says proves the truck used in photos alleging abuse of a PoW never went to Iraq, and with that evidence at hand it is close to being able to expose the pictures as fakes.
News that the pictures are close to being exposed comes as an about-turn from the Army, which had previosuly said it might not be able to prove, one way or another, the origin of the pictures.
However, military police have not been able to establish the identities of soldiers "A" and "B" who took the story to the Mirror.
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