BBC may scrap a TV channel in £2bn cuts

Sir Michael Lyons is poised to impose a series of "radical changes" to make the hefty savings - with BBC3 or BBC4 tipped as most likely candidates for the axe.

The digital channels cost the BBC millions to set up more than four years ago. But, after failing to become a big hit with viewers, they have been identified as possible casualties.

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Documentaries and factual programmes are also thought to be facing cuts.

Sir Michael, chairman of the corporation's governing body the BBC Trust, has refused to rule out the possibility of balancing the books by losing BBC3, which has an annual budget of £93.4million, or BBC4, which spends £46.8million a year.

He said: "Have we ruled out radical changes? No, we haven't. It's about what you can afford to do with the money you've got."

The BBC needs to save £2billion by 2013 to close the gap between its funding aspirations and the actual sum it was awarded in January's licence fee settlement with the Government.

Director-general Mark Thompson is putting together proposals to take to the trust on September 19, although he is not said to favour closing entire channels.

According to the industry magazine Broadcast, programmes such as The Culture Show, Horizon, and Timewatch would be affected, with a source claiming it sounded the death knell for documentaries.

The magazine said a memo outlining plans for each factual programming strand to have its budget cut by around 20 per cent, or drop an episode from its run, had been sent to studio heads and production executives.

The highbrow channel BBC4 began broadcasting in March 2002 and was swiftly dubbed a "digital disaster". Ten months on, it was pulling in as few as 1,000 viewers for its top shows. For others, the measurement system was unable to detect anyone watching.

Since then, despite digital television becoming more popular, figures have climbed from a 0.1 per cent share of the TV audience to only 0.4 per cent last month.

BBC3 - seen as a testing ground for new comedy and drama - has fared little better, with audience figures slumping as low as 19,000 on its opening night in February.

However, popular shows such as Little Britain put it on the map and episodes of Doctor Who and EastEnders have continued to boost its fortunes from an initial 0.7 per cent share of the TV audience to 1.3 per cent last month.

But that is still less than the number watching rivals ITV2 and E4.

Sir Michael has said that the trust will decide on cuts at a meeting on October 17.

In an interview marking his first 100 days as chairman, Sir Michael also vowed to win back public confidence in the BBC, which has taken a battering over fake competition phone-ins on programmes including Children in Need.

It has also recently had a run-in with Buckingham Palace over misleadingly-edited footage of the Queen.

Sir Michael added that the BBC faces a "big challenge" to win back the faith of viewers.

A BBC spokesman said that discussions about the shape of the BBC were taking place, but there would be no comment on any decision until autumn.