The story so far: A Prime Minister who gambled away his country's honour and safety in an unprovoked war sets his personal attack-dog on the BBC, savaging it to the point of near-collapse. The public is shocked. Blair and Hoon and Straw and the rest, their credibility in tatters after the revelations of the Hutton inquiry, equivocate and wriggle, and try to blame others. But the damage done to the BBC remains: it looks like a wounded animal at bay, with the hounds baying for its blood. 

How did this happen? Unlike the American news media, the BBC was determined to maintain its reputation for objectivity during the Iraq war. It declined to be 'on message'. Alastair Campbell was encouraged to bombard it with angry letters – as many as twelve in a single day – but failed to browbeat it into submission. Then, after the war, Andrew Gilligan's carelessly worded early-morning broadcast about the misleading nature of the WMD dossier, and his later Mail on Sunday article, gave Campbell an opportunity for revenge. Accusing the BBC of lying, he demanded an apology. The BBC's chairman Gavyn Davies, and the director general Greg Dyke, exasperated by Campbell's bullying and anxious to show they were not the New Labour patsies the Conservatives had claimed, overreacted. Following their lead the BBC governors rightly rejected the charge that the BBC had an anti-government bias over the war, but they also initially backed Gilligan's story without qualification. 

What followed was the tragedy of Gilligan's source David Kelly, thrust into the ring to refute Gilligan (or 'fuck' him, as Campbell put it). But Kelly couldn't really refute him, since the essence of the story was true. Kelly had also told it to Susan Watts, and other journalists had picked it up too. Kelly killed himself. Blair then chose a reliable judge and gave him a narrow remit to investigate Kelly's death. But this proved a serious case of overkill. Hutton put the evidence online on a daily basis, so that everyone could evaluate it, but came up with a bizarrely partisan judgment, condemning the BBC and totally absolving the government. The effect was counterproductive. However much Blair and Mandelson and others bang on about 'drawing a line under' the affair, and 'moving on', it turns out that a judge's opinion no longer carries weight with the public just because he is a judge, even if – or perhaps especially if – he is also a Lord. Everyone could see it was a stitch-up. 

But Davies resigned as chairman and the rest of the governors panicked. Against the advice of the BBC's own lawyers they issued the further, abject apology that Campbell and Blair were demanding, and accepted Dyke's resignation as well. The BBC was left without leadership. The acting chairman, Lord Ryder, a left-over from the Thatcher years, enjoys no confidence anywhere (except perhaps in 10 Downing Street); and the acting director general, Mark Byford, is a life-long 'Beeb' manager without distinction. It will apparently take at least three months to appoint new leaders. Meantime the corporation faces its enemies in a position of extreme weakness. 

To assess the danger we have to begin by realising that no one in any position of influence today – in the cabinet, in parliament, in the Department of Culture, or in the new commercial broadcasting regulator Ofcom – now conceives of broadcasting as anything but a market matter. This point cannot be overemphasised. No-one in authority starts out from the proposition that there should always be a big publicly owned and financed broadcaster, as necessary component of democracy. That is not the framework within which policy will be made. 

Tessa Jowell's advisers in the review of the BBC's Charter, which expires in 2006, are Thatcher's former economics adviser Lord Burns, and the chair of Channel 4, Barry Cox, both old friends of the Blairs and champions of market-based broadcasting. (And right there in Number 10 is Greg Dyke's predecessor, Lord Birt, smarting from Dyke's unceremonious dismantling of his brainchild, the BBC's 'internal market'.) Most if not all of these people see the current BBC as an anomaly, a residue of pre-market media history. The only question for them is how fast it should be reduced to being a 'market player' like the rest. 

Here different interests and standpoints do come into play. BSkyB, for example, in which Murdoch owns a controlling 34 per cent share, would like to see the BBC reduced to pioneering 'difficult' programmes that Sky could then take over and make money out of. It would also be quite happy to see the BBC forced to take advertising, since Sky depends predominantly on subscription income. ITV plc, on the other hand, would also like to see the BBC forced to give up all audience-maximising programming, but not to rely on advertising, since this would reduce its dominant share of tv advertising revenue. Channel 4 wants a definition of its public service broadcasting obligations that will leave it able to hold onto its current share of that revenue. Independent programme makers want the BBC to be obliged to outsource more of its total output for them to produce. The online and digital niche channel companies want the BBC forced to stop running websites and channels that compete with theirs (e.g. the BBC's UK History vs. the History Channel). 

The Conservative broadcasting spokesman John Whittingdale, advised by David Elstein, the former head of Channel 5, wants to see the BBC 'lose its dominant position in television broadcasting'. He argues that the licence fee is 'more regressive than the poll tax' and should be cut. As for Labour, its media select committee chairman, Gerald Kaufman, is violently anti-BBC, and his Labour colleague Derek Wyatt even more so, although backbenchers of both parties include many with a soft spot for the corporation (Radio 4, especially, has a devoted following among listeners of all parties in 'middle England' and beyond). 

In the Charter review process between now and 2006 a temporary compromise seems likely. The licence fee will probably be slightly reduced, and some of the revenue from it offered to other broadcasters for 'public service' programming – current affairs, educational, religious, regional, etc. The BBC will also probably be required to outsource a significantly higher quota of its non-news programmes (currently 25 per cent), leading to heavy cuts in its in-house production teams. And it will most likely be made to sell off its commercial arm, BBC World Wide, which currently provides ten percent of the BBC's revenues, and give up some of its websites and digital channels that compete most directly with commercial interests. Even a few of these steps will involve drastic reductions in the BBC's budget and staff. 

This isn't to say that a slimmer BBC couldn't still be a big player. Greg Dyke's strategy of expanding into new digital niches of all kinds was smart, so long as ITV's advertising revenue remained buoyant. But when ITV got into financial difficulties with a slump in advertising revenue, and massive losses from its ill-fated digital broadcasting venture, ITV Digital, there was bound to be a reaction. The BBC was seen as using 'taxpayers' money' to become dominant in the new media at the expense of its hard-hit commercial competitors.

The fact is that the BBC could lose half its staff and still be the biggest broadcaster in Britain. Indeed BBC television could probably even do quite well as a subscription-only service, charging a lot less than BSkyB. But in either case the BBC would no longer be able to set the pace in British broadcasting in the way it does now, and unless its position were more or less constitutionally secured, later governments would be likely to downsize it still further, if not privatise it completely.  

Because what is likely to happen in the longer run is becoming painfully clear. After analogue switch-off all broadcasters will be operating in a digital market in which scarce spectrum capacity no longer acts as a barrier to entry. Competition for audiences will be stiffer than ever, and the existing commercial broadcasters with public service mandates – ITV, Channel 4, and to a lesser extent, Channel 5 – are already saying that they will then need to be paid to undertake public service obligations. The message is: give us some of the licence fee revenue, or leave us alone to broadcast cheap shows that attract mass audiences. 

Anticipating this, Ofcom is already conducting a review of what 'public service broadcasting' is, or should be – and since Ofcom is an 'independent regulator', what it decides is what will happen. The chances are that the concept will be reduced to a series of measurable obligations laid on some 'free-to-air' channels in return for tax-funded subsidies of some kind (to replace the profitable privilege of using scarce analogue spectrum, as is the case now) – and Tessa Jowell has already indicated that Ofcom's views will be a significant element in her department's thinking about the future role of the BBC. 

Moreover even these obligations are likely to be progressively reduced over time, because they will still be seen as cutting into shareholder profits – and as restricting the channel owners' freedom to broadcast news and current affairs programmes that reflect their political views. Ofcom's predecessor in this area, the Independent Television Commission, failed to penalise Fox News for blatantly biased reporting on Iraq. The chances of Ofcom preventing a future American-owned ITV from flouting its remaining public service obligations are surely modest. 

As the BBC's John Willis said, after a year spent studying television in the USA, the really good American shows we see in Britain, like the Sopranos and the Simpsons, are rare exceptions to what he rightly called the 'wasteland' that American television has become, as successive governments, responding to intense lobbying and election contributions, have progressively scrapped regulation. And American news programmes are – to say the least – uncritical of US policies abroad, and corporate agendas at home. In this context, while a scaled-down BBC may remain, it won't be a force capable of withstanding the pressure of the competition for audiences that will then prevail, or of setting standards that commercial channels find they have to match, as has been the case in Britain up to now. 

The immediate focus is bound to be on the role of the BBC governors, following their pathetic recent performance both as regulators and as defenders of the BBC's independence. The Communications Act provides for Ofcom to become the BBC's regulator if the Charter says so, and in the long run this seems inevitable, though some interim fudge may well be made. But if the Governors or anyone else are to be effective defenders of the BBC's freedom to stand up to governments in its news reporting and investigative journalism, they will have to be chosen in a different way and be people with serious broadcasting backgrounds and public credibility, as opposed to today's feeble placemen and women. 

Now that parliament has become so subordinate to governments the BBC has assumed the role once played by public meetings and the penny press, quizzing ministers and officials unscripted, and digging for information governments want to hide. Its role in our democracy today is hugely important. Yet we face a shameful fact: today this role is completely without a real champion in any position of influence. 

There is a huge gap here between the political leadership of all parties, and public opinion. The post-Hutton polls showed that people trust the BBC more than the government, even though they also tell pollsters that the BBC is less good than it was (they would surely say the same about ITV and Channel 4 if they were asked, since all of them have 'dumbed down' in the latest ratings war). People make a common-sense distinction between the BBC's political role, which they admire and value keenly, and its role as a provider of entertainment. 

The hope, then, must lie in public pressure. We need an alliance of the NUJ and other unions, and a wide range of other organisations, plus a mass expression of opinion by individuals: calling and writing to MPs and newspapers, calling the BBC and other channels, lobbying and intervening in elections, all demanding that the corporation not be treated as just another broadcaster, but be constitutionally entrenched as a vital element of our democratic system – such as it still is.