Sir Michael Lyons, the Chairman of the BBC Trust, has hinted that the BBC may have to sacrifice one of its channels to meet budget cuts of £2 billion that will be imposed over the next six years. He did not rule out axing BBC3 or BBC4 as part of the “radical changes” needed to help the corporation to balance the books.

Scrapping an entire channel is not thought to be an option favoured by Mark Thompson, the Director-General of the BBC.

However, Sir Michael, who has been chairman of the trust for only 100 days, said in an interview yesterday that the corporation must rein in expenditure across its increasingly large portfolio when it examines cost-saving plans this autumn.

He said: “Have we ruled out changes? No, we haven’t. It is about what you can afford to do with the money you’ve got.”

Blue Peter faces new scandal

It has emerged that production staff ignored the result of a viewer poll to choose a name for the Blue Peter cat last year

BACKGROUND

• BBC fined £50,000 for Blue Peter scandal

• BBC boss and the Queen’s ‘huff’

• Time to hang up on TV phone-ins

• GMTV cheated 25m of its phone-in callers

There is speculation that BBC3, which spends £93.4 billion of its annual budget on programmes such as Torchwood and Little Britain to attract a younger audience, or BBC4, home of more highbrow fare such as The Thick of It, with an annual budget of £46.8 million, may be among the casualties.

Sir Michael also criticised Peter Fincham, the Controller of BBC One, for his part in the editing controversy surrounding footage of the Queen.

The intervention demonstrates that Mr Fincham, the man behind Britain’s most watched television channel, may not be able to hold on to his job once an inquiry into the affair concludes.

Asked specifically if Mr Fincham should have checked personally to see if a promotional film that purported, wrongly, to show the Queen storming out of a photoshoot with Annie Leibovitz, the BBC’s chief regulator agreed. “Do I personally think it was reasonable to check something that was so newsworthy? Yes I do,” Sir Michael said in an interview with The Times. “And that is a question I and the BBC Trust continue to ask.”

Sir Michael said that the BBC Trust had “yet to reach a judgment” on the affair, and would wait until an independent examination by Will Wyatt, a former senior BBC executive, concluded in October.

The promotional film was made by an independent production company, RDF Media, and showed two key scenes in the wrong order. A shot of the Queen apparently leaving the photoshoot was actually an image of her walking in. However, after the film was received by the BBC, it was never checked and was instead shown to journalists, with Mr Fincham describing the Queen as walking out “in a huff”.

Technically the BBC Trust is able to dismiss only the Director-General, but in reality if the trustees were deeply unhappy with Mr Fincham’s conduct it is hard to see how he could continue in his position.

RDF Media has already been suspended from new commissions while the Wyatt inquiry continues, and Sir Michael said that trustees “had debated with Mark Thomson” about whether he was being even-handed about suspending the production company but not the Controller of BBC One.

The Chairman also added that some tough decisions would need to be made on the future of the corporation.

“The issue on the anvil is that the trust has the responsibility for approving how the licence fee monies are going to be used. We are the decision-making body. Clearly, it’s the job of the executive to actually put together the proposals — our job is to challenge that and to explore, firstly, does it meet the [BBC's public] purposes? And, secondly, does it meet what the public are telling us?”

Sir Michael, who replaced Michael Grade, was giving his first newspaper interviews after the BBC admitted that it was embroiled in a series of scandals about faked content. Shortly after the row involving the film about the Queen erupted last month, the BBC was also forced to admit that production staff had made up winners of phone-in competitions held as part of the Comic Relief and Children in Need fundraisers.

Despite the lapses in standards, Sir Michael said that Mark Thompson was “a capable and distinguished Director-General” who “has the confidence of the trustees”.

But in an effort to demonstrate that Mr Thompson faced pressure from the BBC’s regulator, Sir Michael said that he and other senior BBC executives would be judged by the success of their action plan to boost standards, which included compulsory retraining for all staff.

BBC Trustees are planning a review of the action plan early next year, to be conducted Ron Neil, the former head of news. “If the actions [introduced by Mr Thompson] have not had an effect, it brings into question not only the actions, but the person responsible,” Sir Michael said. So far only a handful of production staff have been suspended.

The regulator said that he didn’t want to treat the problems as “isolated cases”, although he said that as of yesterday he was not aware of any other emerging instances of viewer deception at the public broadcaster.

Sailing into stormy waters

— A BBC One trailer wrongly implied that the Queen had stormed out of a sitting with the photographer Annie Leibovitz. RDF, the production company, accepted blame for the misleading editing

— Children In Need, Comic Relief and Sport Relief were among six programmes found to have deceived viewers in phone-in competitions. The others were on the World Service, BBC 6 Music and the children’s channel CBBC

— A Blue Peter executive stepped down in May two months after the show had to apologise for faking competition results. The BBC was ultimately fined £50,000 by Ofcom for deceiving viewers on the show

— BBC employees posed as audience members for Top of the Pops when it was discovered that the corporation had no licence to stage live music for the public

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