The National Union of Journalists (NUJ), representing BBC journalist Mr Andrew Gilligan, said Britain's state broadcaster could face a strike if he was disciplined or fired.
The NUJ said the Hutton report was "selective, grossly one-sided and a serious threat to the future of investigative journalism".
Lord Hutton has said BBC claims the British government "sexed up" a dossier on Iraq's weapons capability were "unfounded" in his report on the death of weapons scientist Mr David Kelly.
Speaking of Mr Gilligan's allegations that the government included a claim that Iraq could launch WMD within 45 minutes in a dossier even though it knew it was false or unreliable, Lord Hutton said: "I consider these allegations to be unfounded as it would be understood by those who had heard the broadcast it to mean that the intelligence set out in the dossier was unfounded."
Lord Hutton's findings will strengthen BBC critics who say the broadcaster should fall under the oversight of Britain's media regulator Ofcom. Conservative leader Michael Howard said the case for outside regulation of the BBC "has never been stronger".
The BBC feud with Mr Blair's government comes as the publicly-funded broadcaster is about to undergo a parliamentary review of its charter, and at a time when the mandatory licence fee that provides most of its funding is under fire from the private sector.