The BBC will not challenge a ruling over its coverage of a police raid at Sir Cliff Richard’s home in 2014 at the Court of Appeal.
A High Court judge ruled the BBC had infringed the singer’s privacy, awarding him £210,000 in damages in July, and refused leave to appeal.
The corporation will now seek advice from the attorney general over the ruling’s impact on future reporting.
“There is a fundamental principle of press freedom at stake,” the BBC said.
A spokesperson for Sir Cliff said he welcomed the BBC’s decision, adding that he “hopes that outstanding issues can be resolved quickly”.
Sir Cliff was never arrested or charged during the police investigation.
It followed an allegation made by a man who claimed he was sexually assaulted as a child by Sir Cliff at an event at Sheffield United’s Bramall Lane stadium in 1985.
The BBC has apologised to Sir Cliff for the distress caused by its coverage, but originally wanted permission to appeal, arguing the court judgement could threaten press freedom.
After considering the rejection of its High Court appeal application, the broadcaster has decided not to go directly to the Court of Appeal.
The BBC said appealing would be “an expensive legal cul-de-sac and one that would simply prolong Sir Cliff’s distress”.
However, it is writing to ask the attorney general to “consider a review of the law in this important area to protect the right to properly and fairly report criminal investigations, and to name the person under investigation”.
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In the letter, the BBC’s director-general Tony Hall writes: “The BBC has decided not to seek permission from the Court of Appeal to appeal against that judgment – even though we are advised and believe that the judge erred in law in finding that broadcasters and journalists, when reporting on matters in the public interest, normally have no right to publish the name of a person who is the subject of a criminal investigation.
“That issue is a matter of very considerable general importance, as the prime minister herself recognised on the day of the judgment.”
Mr Hall added that it was his understanding the Court of Appeal would say that it was for Parliament, not the judiciary, to set out “in detail the balance between competing public interests”.
But the attorney general’s office has since told BBC News that a legal review would not fall under its remit and that Mr Hall should re-direct his letter.
Last month, Mr Justice Mann ruled in favour of Sir Cliff, 77, following the trial in London.
The judge’s findings included that Sir Cliff had a right to privacy while he was a suspect in the South Yorkshire Police investigation – trumping the broadcaster’s right to freedom of expression to publish his name and cover the raid.
He concluded that the BBC’s coverage – which involved a helicopter filming the search at Sir Cliff’s Berkshire home – had been a “very serious” invasion of privacy.
Mr Justice Mann awarded Sir Cliff £190,000 damages and an extra £20,000 in aggravated damages after the BBC submitted its coverage of the raid for an award.
The BBC was told to pay 65% of the £190,000 and South Yorkshire Police 35%.
The BBC also agreed to pay Sir Cliff £850,000 towards his legal costs.
South Yorkshire Police had earlier agreed to pay Sir Cliff £400,000 after settling a claim he brought against the force.