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In an interview in the Financial Times, culture secretary Tessa Jowell seemingly ruled out any major overhaul of the way the BBC is funded.

She told the paper that the "prospect of the UK without the BBC funded by the licence fee is anywhere between improbable to impossible, because the BBC is one of the most loved and trusted UK institutions".

The news was attacked by the opposition, which said the move made a mockery of the review of the BBC's charter. The shadow culture secretary Tim Yeo went on to brand Jowell's comments as "absolutely astonishing".

"In the 10 years since the last charter renewal, the whole television and broadcasting sector has changed radically. To simply dismiss the alternative possibilities before the debate has taken place not only shows a closed mind but may also work against the interests of viewers and broadcasters," Yeo said.

By far the largest slice of the BBC's income comes from the £109 licence fee, which is meant to be paid by every household with a television set. The licence fee generates £2.3bn a year.

The BBC also earns hundreds of millions of pounds from its commercial arm BBC Worldwide. This money is invested back into the BBC.

Prior to Jowell's announcement, it had been expected that sometime between now and 2006, when the corporation's current charter expires, the government would look at alternative funding options.

Among the options up for consideration were the wholesale privatisation of the BBC, the introduction of subscription charges or turning the BBC into a mutual society.

However, Jowell's comments seem to rule out any such radical changes and indicate the government is happy to leave the renewal of the charter for another 10 years.

Jowell told the newspaper: "When I say that this is a no-holds-barred charter renewal, it's a renewal not a deconstruction [of the BBC]."

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