The licence fee currrently costs viewers £126.50 a year and gives the corporation £2.94bn a year to spend.
BBC director-general Mark Thompson and chairman Michael Grade have today outlined how much money the BBC will need from 2007 and have calculated a rise in the licence fee of £3.14 a year excluding RPI.
The BBC estimated in its report that the new licence fee charge would be £150.50 a year under its proposals.
Taking current inflation, which is at 2.5%, this means the licence fee could in fact soar to £183 by 2012 and £210.50 by the end of the 10-year charter in 2016.
The government will decide on the propsals next year when the BBC's 10-year Royal Charter is up for review.
The extra money would be ploughed into digital switchover and new technology so all licence fee payers can access BBC content when the analogue signals are switched off from 2008. Digital switchover is expected to be completed by 2012.
"The BBC needs to transform itself to ensure we are providing the very best content, accessible to and valued by everyone across Britain, and the licence fee will help us achieve our vision to be the very best creative digital broadcaster and content provider for audiences in the world," Thompson said.
The BBC has already initiated massive cost savings by axing 3,750 jobs at the corporation as part of wide-ranging reviews aimed at saving money in the run-up to charter renewal.
In May, Grade argued that the BBC should continue to be wholly funded by the government, and other broadcasters should not be given a share of the £2bn licence fee, known as top-slicing, as recommended in the government's Green Paper.
"The licence fee is central to the whole idea of the BBC as we know it. We feel strongly that the fundamental strengths of the licence fee system will remain valid -- if not even more valid -- in the fully digital world to come," Grade said.
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