BBC plans to dumb down in move for more populist programmes

Its findings are likely to lead to a shakeup in the way the £3.4billion annual licence fee revenue is spent.

Early results show that lower-income families are less well served than their wealthier counterparts, prompting fears that the Corporation will plunge downmarket.

It has found that lower-income families, particularly in the north of England and Scotland, are less likely to watch digital channels such as BBC3, aimed at a sophisticated twenty-something audience, or tune in to BBC4's high-brow output.

By contrast, higher-income groups make good use of a wide range of services, including Radio 4 and News 24, and are more likely to take advantage of new ones, such as podcasts and Internet downloads.

The Household Value project, the brainchild of director Mark Thompson and marketing director Tim Davie, will take several months to complete.

"We may discover Radio 1 or BBC3 is more important than we thought, and double investment in that service - but reduce spending on others," one senior BBC executive told The Observer yesterday.

Ensuring that lower-income families continue to tune in is vital for the future of the BBC, which recognises it is the only way to guarantee popular support for the licence fee.

The review and its ramifications are likely to cause further upheaval at an organisation that is in the process of shedding 6,000 jobs and recently lost its fight for a major licence fee hike.

The cost of a licence will rise from £135.50 to a maximum of £151.50 by 2012, less than the rate of inflation.

But the inevitable changes are bound to lead to accusations that the BBC is dumbing down its content in order to survive in a market swamped by cable and satellite providers.

As more homes sign up for extra channels through cable and satellite, the BBC's hit shows such as EastEnders and Strictly Come Dancing will become more important.

Executives plan to introduce a new 'controversial and sassy' female character to Albert Square to spice up EastEnders, which is currently being beaten in the ratings by ITV's Coronation Street, the paper reports.

The BBC was recently reported to be 'in crisis' after its £10million reality series Castaway became its biggest ever flop. The show, shot this season in the South Pacific rather than in the Scottish islands, is one of the most expensive in BBC history.

Its poor showing comes after BBC1 had its worst-ever Christmas Day ratings last year.

The channel's programmes had eight of the ten biggest audiences for the day and its peak-time figures were up by 11 per cent on last year.

Yet its overall share of viewers for December 25 dipped from nearly 33 per cent in 2005 to 30.5 per cent.

Unprecedented numbers abandoned the five terrestrial stations, with 30.5 per cent of viewing accounted for by other channels.

In recent weeks, executives have come up with various ideas to stem tumbling ratings, including heralding the return of classic British comedy.

BBC chiefs want a return to the golden age of family viewing after complaints that today's comedies are dominated by sexual themes and bad language. The Corporation's big idea is to return to 'ensemble' shows with large casts and 'silly humour'.