The House of Commons Culture, Media and Sport Select Committee has slammed the BBC as "arrogant" and "lacking transparency" in its first report reviewing the broadcaster's Royal Charter.
The 65-page document concluded that the broadcaster's governing body, the BBC Trust, had lost the public's confidence and should be replaced by a new unitary board with an independent head.
Jessie Norman, Chairman of the Select Committee, said: "The new board needs to address a culture within the BBC that has been widely described as bureaucratic, arrogant and introspective."
The report condemned the underhand manner in which former BBC Director of Television, Danny Cohen, orchestrated a 29-signature lobbying letter ahead of Charter renewal.
"The BBC’s website ran, and continues to run, the (lobbying) story as an independent piece of news, without any disclosure in it of the BBC’s own coordinating role," said the report.
"Even after a public newspaper investigation and questions from this Committee revealed the truth, the BBC did not put out an online clarification to this story. The Director-General (Lord Hall) argued that this was simply a case of BBC staff speaking up on behalf of the BBC, when it clearly was not. The Chair of the BBC Trust (Rona Fairhead) refused to accept that the BBC had been in any way at fault on this issue."
The Culture Secretary, John Whittingdale MP, is currently conducting a review into the future governance of the BBC.