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    UPDATE 1-Savile victims allege paedophile ring existed at BBC

    * Sex scandal has raised questions about BBC's judgment

    * Director general has defended the corporation

    * Imbroglio threatens to affect New York Times

    LONDON, Oct 24 (Reuters) - A sex scandal gripping Britain's

    BBC deepened on Wednesday with claims that a paedophile ring had

    existed involving some of its stars, as its former director

    general said his handling of the case shouldn't stop him

    becoming the boss of the New York Times.

    The BBC has been thrown into disarray by accusations it

    helped cover up sexual abuse by one of its most celebrated

    former presenters, Jimmy Savile, and has struggled to explain

    why one of its own shows killed an investigation into it.

    The broadcaster's current Director General George Entwistle

    has been condemned for his handling of one of the worst crises

    in the corporation's 90-year history and questions have also

    been raised about his predecessor Mark Thompson, who is set to

    take over at the New York Times Co next month.

    The British government warned the BBC on Wednesday that the

    scandal was raising "very real concerns" about public trust.

    "These allegations do leave many institutions, perhaps

    particularly the BBC, with serious questions to answer," Prime

    Minister David Cameron told parliament.

    Police and the BBC, which is funded by the public through an

    annual licence fee, are looking into allegations that the

    eccentric, cigar-chomping Savile, who died last year, abused

    young girls over six decades.

    Some of the attacks were alleged to have taken place on BBC

    premises.

    Lawyers representing some of the male and female victims,

    some of whom were as young as eight when the abuse occurred,

    said their clients had indicated an organised paedophile ring

    involving other celebrities had existed at the BBC during the

    height of Savile's fame in the 1970s and 80s.

    "There is information of a possible paedophile ring and we

    have people who have approached us with that information,"

    Alicia Alinia, one of the lead lawyers involved in the cases for

    the Slater and Gordon law firm told Reuters.

    "It seems to be a number of people who were involved other

    than Jimmy Savile, I can't reveal any specific names of

    celebrities involved, but it seems as though it wasn't just

    limited to unknowns."

    Earlier, the BBC said new allegations had been made against

    nine current BBC staff or contributors since revelations about

    Savile were first broadcast by rival British channel ITV.

    These ranged from inappropriate language or behaviour to

    harassment and serious claims of sexual assault.

    "Where appropriate action needs to be taken and people would

    need to be suspended, that will happen," a BBC spokeswoman said.

    In a sign the scandal could spread further, lawmaker Tom

    Watson told parliament a senior aide to an unnamed former prime

    minister might have been involved in a suspected paedophile

    ring.

    "I want to ensure that the Metropolitan Police secure the

    evidence, re-examine it, and investigate clear intelligence

    suggesting a powerful paedophile network linked to parliament

    and Number 10 (prime minister's office)," he said.

    "REAL CONCERNS"

    The developments come at a time when politicians are

    increasingly voicing disquiet about the BBC's broader management

    structure.

    Culture Secretary Maria Miller wrote to the broadcaster's

    independent governing body to say "very real concerns are being

    raised about public trust and confidence in the BBC".

    Lawmakers and the media heavily criticised Entwistle for his

    unconvincing appearance before parliament on Tuesday to answer

    questions over the scandal.

    Thompson, his predecessor, is also facing scrutiny over his

    handling of the case. The public editor of the New York Times

    openly questioned whether the Briton was now fit to serve in his

    new role with such a scandal hanging over him.

    "I do not believe there is anything that I've done in

    relation to this matter which should in anyway impinge on my

    abilities to fully discharge the responsibilities I'll have at

    the New York Times," Thompson told Reuters.

    He said he was not briefed on the high-profile investigative

    programme that was looking into allegations against Savile, who

    hosted prime-time children's shows on the BBC, and that he was

    not involved in the decision to kill its report.

    Entwistle, who replaced him as BBC director general in

    September, told hostile lawmakers on Tuesday that failures at

    the corporation had allowed Savile to prey on young girls, but

    he too denied he had helped suppress the report.

    Damian Collins, a lawmaker from the ruling Conservative

    Party and a member of the parliamentary committee which

    questioned Entwistle, said it still wanted answers.

    "I don't think the director general gave a very convincing

    performance yesterday and I think there were a lot of questions

    about the decisions he's taken," he told Reuters.

    In reference to Thompson, who was director general when the

    decision was taken to drop the investigative Newsnight programme

    into the subject, he said:

    "I find it extraordinary that the decision to close down the

    Jimmy Savile investigation could have been taken without the

    knowledge of the director general, who is the editor-in-chief,

    because this was not any run-of-the-mill investigation.

    "It was one of the highest importance, involving some very

    grave criminal allegations about someone who had been a BBC

    employee for decades."