Posted Sunday, October 5, 2003; 12.48BST
So far, the Blair government has not risked the backlash that would inevitably come from a frontal assault on this venerable institution. Culture Secretary Tessa Jowell has announced a consultation process leading up to the new charter in 2006, which will set out how the BBC will be structured, what activities it can undertake and how they will be paid for. She has already declared that eliminating the license fee is "anywhere between improbable and impossible." But many fear the government still has designs on the BBC's independence. "Vengeance is at the heart of New Labour," Brown argues.

One weakness the government could exploit was exposed during the Hutton inquiry: the BBC's conflicted governance. As Campbell's furious complaints about Gilligan rained down, its board focused on protecting the Corporation from what many thought was really a political attack, and spent far less time probing management about how solid Gilligan's story really was. That Davies and Dyke used to be Labour contributors made them doubly determined not to look like government toadies. But neither read the transcript of Gilligan's most controversial original broadcast for weeks, and an e-mail from his editor saying that his story was "marred by flawed reporting" was not put before the governors before they endorsed the essential truth of his claims. "The BBC sees itself as something of a priesthood," says David Puttnam, a Labour peer and film producer. "When attacked, it assumes you have to be wrong. A fundamental weakness of the Corporation is that it regards even constructive criticism as enmity."

Puttnam thinks it would help crack the BBC's insularity to put it under Ofcom, the brand-new regulator that's about to supervise the rest of Britain's telecom industries, from mobile phones to commercial broadcasters. But communications professor Barnett is convinced that that would eventually destroy the Beeb's public-service ethos. "Ofcom is essentially a commercial regulator with a duty to promote deregulation and competition," he says. "The lobbying on them will be fierce." Under Ofcom, he thinks the BBC would be hollowed out into something weak like the U.S. Public Broadcasting Service, which has one-third of the BBC's budget and nothing like its cultural impact. To gird themselves for the charter review, he suggests the governors become more transparent so that people can see they are exercising real control rather than just rubber stamping.

Will the government use the charter review to punish or curtail the Beeb? "You should never underestimate the depth of love in Labour's love-hate relationship with the BBC," says Stewart Purvis, the recently departed editor of ITN, the BBC's major news competitor. "There's a basic affection for it that goes very deep." Jon Snow, anchor of rival Channel 4 News, points out that "every government has paranoia about the BBC. Every Prime Minister of the day has loathed it, which I think has to be to the good." And still it has emerged intact from all its previous charter reviews. Dyke already announced that the BBC was looking into tightening up its editorial standards, which may help blunt the criticism Hutton is likely to level when he reports by December.

Even if it can't manage to convince its critics that it listens and cares, the BBC would be a dangerous enemy for any government — because as Snow acknowledges, "It is an absolutely brilliant service." Compared to what people with pay TV (39% of British households) spend on their television — €645 per year and rising — the €167 license is starting to look like good value for money. Even the BBC's competitors know it benefits the ecology of their industry. Puttnam, who used to be on the board of an independent TV company, says, "We would have liked to get away with cheaper dramas, but we couldn't. The BBC sets a quality benchmark everyone else has to meet." And it's careful to promote services with broad appeal, like the Freeview set-top box that allows anyone to receive digital channels without paying a monthly subscription. It's the fastest-growing consumer product in the U.K., with 2.1 million homes now able to get the service.

So it's not entirely by accident that Davies didn't get indigestion last week during his lunch with Labour M.P.s. "It went very well," he said afterward with a smile. This week, he'll be building more support for the beleaguered Beeb among Conservatives at their annual conference in Blackpool — one meal at a time.

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