Fury of BBC over Cameron's £250m bid to end its public service monopoly

David Cameron was last night accused of paving the way for the destruction of the BBC after he threatened to hand £250million of its money to other broadcasters.

The Tories plan to force the Corporation to give away part of its licence fee funds to create new competition in public service broadcasting.

The move will break the BBC's "monopoly" over programmes and guarantee more quality output in areas such as children's television, the Tories claim.

"We must ensure there is plurality of provision of quality broadcasting content," says the party's new blueprint for public service broadcasting, to be unveiled tomorrow.

The move will be coupled with a plan to scrap the governing BBC Trust - itself only set up last year - and replace it with a more independent "public service broadcasting commission".

But the plans prompted an angry backlash from the BBC - which claimed it would mark the beginning of the end of the Corporation.

"Once you take away part of the licence fee you break the trust between the BBC and the licence-fee payer," said a senior BBC executive.

"The viewer won't know who on earth their money is going to and will say, 'why on earth should I pay this any more?'

"Going down this route will eventually destroy the BBC.

"If the Conservatives want to get rid of us, they should come out in the open and say so rather than do it in this underhand manner of death by a thousand cuts."

But Tory culture spokesman Jeremy Hunt said: "That is totally wrong. The BBC is the crown jewels but for British broadcasting to be healthy, we need to have quality public programmes from many sources - not just one."

The annual licence fee, currently £135.50 for a colour television and £45.50 for black and white, brought in £3.2billion last year to fund the BBC's empire of eight national TV channels, 10 national radio stations and more than 200 separate websites.

But the levy has sparked increasing controversy with one MP denouncing it as a "poll tax on televisions" and rival broadcasters complaining that it gives the BBC a massive unfair advantage over them.

The Tories are now proposing to "top-slice" the licence fee income and put some of it into a new fund available to outside bidders - including the Corporation's commercial rivals.

The BBC could bid for a share of the money but "it would probably be preferable for these funds to go to new organisations or new channels where it has been shown there is a gap in the market," says the Conservative document.

Privately, the Tories have earmarked £250million for the fund to come out of money currently being allocated for the switch-over from analogue to digital broadcasting which is due to be completed by 2012.

The fund would be overseen by the new independent commission-to oversee the BBC and the whole public service broadcasting sector, with its members appointed by Parliament - not by Government Ministers.

The proposed shake-up comes even though the current Trust, chaired by former local government executive Sir Michael Lyons, was only set up last year to replace the Board of Governors.

The Tory blueprint dismisses the current Trust as "a creature of the BBC which therefore lacks any kind of public accountability".

It adds: "Whether it was the fall-out from the Hutton inquiry... or the competition and quiz show scandals that affected all broadcasters last year, there is clearly a need for reform that preserves the public's trust in the broadcasting sector".

Ironically, the party's plans come after an apparent thawing of relations between the BBC and the Tories.

The Mail on Sunday has learnt Mr Cameron and BBC executives, including Director-General Mark Thompson and the Corporation's chief operating officer Caroline Thomson, held a secret summit on February 28.