We encountered this error when we tried to create a new site. However we were able to resolve the issue with the help of following steps.
- Navigate to Central Administration -> Operations -> Service Accounts (under Security Configuration)
- Choose “Web Application pool”
- Select the correspoding application pool
- If selected account is Predefined - “Network service”, configure it to your site collection administrator.
- Try creating the site after switching the account to your site collection administrator.
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