Grade and director-general Mark Thompson were apparently adamant that Humphrys should lose his job in an attempt to appease New Labour. However, Thompson performed a U-turn when the national press came out in support of Humphrys.
Humphrys was instead rebuked in a statement by the BBC, which deemed his comments "inappropriate and misguided". The corporation said it was drawing a line under the incident.
According to the New Statesman's editor and former BBC journalist John Kampfner, Grade was eager to placate the government at a time when it is reviewing the BBC's Royal Charter.
The BBC statement followed its investigation into a speech the presenter made at the Communications Directors' Forum in June. In it, he insinuated that all MPs were liars and that the government had "sexed-up" Iraq intelligence, despite the findings of the Hutton Report.
Many observers were sympathetic to Humphrys, especially when it emerged that his comments were leaked to The Times by Tim Allan, a former Labour spin-doctor.
In his speech at the forum, Humphrys described Gordon Brown as "easily the most boring political interviewee" and Peter Mandelson as widely "detested".
A spokesman for the BBC denied that the New Statesman report bore any truth, saying: "The notion that Michael is anti-difficult journalism is tosh."
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