BBC board faces Labour 'revenge'

The panel said a Public Service Broadcasting Commission (PSBC) would keep the corporation in check and set the licence fee.

Commentators believe the proposals could be used by the government to wreak revenge on the BBC for its role in the Hutton Inquiry. The recommendation, made by a panel led by the former Treasury official Lord Burns, will be one of the options for the BBC’s future to be set out in a green paper in March.

The board of governors currently acts as both regulator and defender of the BBC and the corporation has already promised to make changes to the role. But Lord Burns said the BBC plans did "not go far enough".

Tessa Jowell, the Culture Secretary, has warned the BBC board must be overhauled, calling the current situation "unacceptable".

The governors’ role was highly scrutinised in the wake of the Hutton Inquiry, which investigated BBC reporting of government claims about weapons of mass destruction in Iraq. The inquiry largely exonerated the government, prompting the resignations of BBC director general Greg Dyke and chairman Gavyn Davies.

Lord Burns’ panel, commissioned by Ms Jowell, agreed the present system was "unsustainable" and required radical reform. The panel said: "It is inherently difficult for one group of people - the current governors - to provide leadership of the BBC and to be responsible for promoting the success of the BBC by directing and supervising its affairs whilst at the same time being the body that is responsible for overseeing the content of the BBC. This gives rise to considerable tension."

The current system lacks transparency and has created a perception that the BBC is run in its own interests rather than those of the licence fee-payer, it said. Instead the panel recommended the creation of the PSBC - similar to the existing Ofcom but specific to the BBC - made up of non-executive commissioners and advisers.

The PSBC would have the power to award part of the licence fee to other public service broadcasters, such as Channel Four. That has echoes of the "Arts Council of the Airwaves" idea, whose backers include television executive and arts producer Lord Melvyn Bragg.

Robert Beveridge, a lecturer in media policy at Napier University in Edinburgh, said: "This means the government and the BBC are on course for a showdown.

"This is exactly what the new BBC chairman, Michael Grade, was trying to avoid. This will be seen as the government getting its own back on the BBC.

"The problem has always been the question of public service. The BBC has to try and make public service programmes interesting enough to get the audiences required to justify the licence fee."

Liberal Democrat spokesman Don Foster said the proposed changes would "threaten the independence of the BBC".

Labour MP Chris Bryant - a member of the culture select committee and former BBC employee - backed the scrapping of the board of governors.

He said: "The BBC should be strong. It needs to be a big powerhouse of good high-quality productions for the future because otherwise we are not going to be seeing great British programmes as we have done in the past."

A BBC spokeswoman said: "Lord Burns and his panel have carried out their deliberations with intelligence and rigour and we have participated fully in the debate, most recently at the seminar on governance in December, when the chairman outlined the principles that the BBC board of governors believe any system of governance should deliver. We now await the government’s green paper."