Recently appointed to the top job at the BBC, Mr Entwistle is reported to have taken legal advice ahead of his appearance at the Culture Select Committee tomorrow. He will be asked why he failed to act after being informed by the BBC's director of news Helen Boaden that a Newsnight investigation into sexual allegations against Jimmy Savile would mean he would have to change or remove tributes to the broadcaster in his Christmas broadcast schedule.
The pressure on Entwhistle increased after the Prime Minister intervened following the sidelining of Newsnight's editor Peter Rippon this morning.
Speaking today the PM said the "nation was appalled" by the allegations against Savile.
Mr Cameron also expressed concern over what he said was the BBC "effectively changing its story" about why the Newsnight report into sex abuse allegations was dropped.
"The developments today are concerning because the BBC has effectively changed its story about why it dropped the Newsnight programme about Jimmy Savile" he said after a speech in London today.
"These are serious questions, they need to be answered. They need to be answered by these independent reviews that the BBC has established and I am sure that they will be."
Mr Cameron's comments came as the BBC announced the editor who was responsible for the pulling of a Newsnight report into the Savile claims, Peter Rippon, was 'stepping aside'.
Mr Rippon's decision comes amid another day of scandal and pressure for the national broadcaster over the Savile allegations.
The BBC said he would be standing aside 'with immediate effect.'
This evening, further revelations are expected from the BBC's own Panorama report into the scandal.
It emerged yesterday evening that Mr Rippon had been warned by Meirion Jones, a Newsnight producer, that the BBC risked the appearance of "a cover-up" by dropping its report into the disgraced star.
Mr Jones reportedly emailed Mr Rippon to warn him about what would happen if the investigation was dropped.
"I was sure the story would come out one way or another and that, if it did, the BBC would be accused of a cover-up," Mr Jones told Panorama.
"In fact, I wrote an email to Peter saying 'the story is strong enough' and the danger of not running it is 'substantial damage to BBC reputation'."
Two days later, Mr Rippon decided to kill the investigation.
He denies that he was placed under any pressure to drop the investigation and insists that the decision was based on "honestly judged" editorial considerations.
In a statement issued today the corporation corrected a blog written by Mr Rippon on his decision to drop the Newsnight report on Savile.
It claimed the blog was "inaccurate or incomplete in some respects".
It continued: "The BBC regrets these errors and will work with the Pollard Review to assemble all relevant evidence to enable the review to determine the full facts.
"In addition, the BBC has announced that Peter Rippon is stepping aside with immediate effect from his post while the review by Nick Pollard... into the management of Newsnight's investigation, is carried out."
Mr Rippon's initial explanation was published on a BBC blog and said there was no evidence that staff at the Duncroft approved school could have known about allegations that Savile abused children.
The correction now states "In fact some allegations were made (mostly in general terms) that some of the Duncroft staff knew or may have known about the abuse."
It adds: "The blog says that all the women spoken to by the programme had contacted the police independently already and that Newsnight had no new evidence against any other person that would have helped the police. It appears that in some cases women had not spoken to the police and that the police were not aware of all the allegations."
Pressure also continued to mount today on the BBC's Director-General, George Entwistle, who was last night facing questions about his judgement, after it emerged that he decided to broadcast a tribute to Savile, despite knowing of the Newsnight investigation into claims of sexual abuse.
Two inquiries into the scandal have already been announced by Entwistle, who will tomorrow appear before MPs to face questions about the BBC and Savile.
The full extent of Mr Entwistle's knowledge of the shelved investigation is set to be revealed in a BBC Panorama documentary to be screened tonight.
The Panorama special programme claims Helen Boaden, the BBC director of news, warned Mr Entwistle about the investigation and its possible impact on planned tributes to Savile.
The tribute programme went ahead despite the warning, and made no mention of the allegations against Savile.
Tonight's hour-long documentary, which will be broadcast on BBC1 at 10.35pm, features Meirion Jones and reporter Liz MacKean, both claiming they interviewed at least four of the alleged victims of Jimmy Savile.
Ms MacKean said: "Ever since the decision was taken to shelve our story, I've not been happy with public statements made by the BBC.
"I think they're very misleading about the nature of the investigation we were doing."
John Simpson, the BBC foreign editor, today described the rapidly escalating scandal as "the worst crisis that I can remember in my nearly 50 years at the BBC".
The BBC Trust, the corporation's governing body, said today it was "deeply concerning that there have been inaccuracies in the BBC's own description of what happened in relation to the Newsnight investigation".
It comes after excerpts from tonight's edition of Panorama highlighted the different explanations given by BBC bosses about the nature of the documentary and why it was dropped.
In the aftermath, BBC Director-General George Entwistle wrote to all staff saying that the Newsnight investigation was into "Surrey Police's inquiry into Jimmy Savile towards the end of 2011".
But producer Meirion Jones immediately emailed Mr Entwistle countering that, writing: "George - one note - the investigation was into whether Jimmy Savile was a paedophile - I know because it was my investigation.
"We didn't know that Surrey Police had investigated Jimmy Savile - no-one did - that was what we found when we investigated and interviewed his victims."
A Panorama statement said: "Peter Rippon has always maintained the story was pulled for 'editorial reasons' and not because of a potentially embarrassing clash with planned BBC tributes to Savile over Christmas.
"Panorama has found no evidence to contradict that view."
Allegations of abuse by Jimmy Savile only emerged after an ITV broadcast earlier this month, police have said they are investigating a possible 200 cases.
The NSPCC has said Savile may have been "one of the most prolific sex offenders" it had come across.
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