Grade was well regarded by culture secretary Tessa Jowell, but his leaving to become executive chairman of ITV in a reported £8m deal could spell an end to any realistic hopes of agreeing a substantial licence fee increase in the next few weeks.
Chancellor Gordon Brown has previously said he would not agree to a licence fee increase of above inflation minus one percentage point, but the BBC has proposed an inflation plus 1.8 point increase over the next seven years from April 2007, which would eventually make the annual cost of a TV licence around £180 by 2013.
According to reports, the BBC missing out on its proposed licence fee package could result in the corporation losing an estimated £550m over the next 10 years.
The fallout from Grade's decision to join ITV in the new year was being downplayed by the BBC last night, with director-general Mark Thompson describing senior colleagues' reaction as closer to "raised eyebrows" than "incandescent rage".
However, Grade's strong ties with key cabinet members cannot be underestimated, and his departure will have repercussions for the BBC's future.
A few names have already been cited as possible contenders for the now vacant chairman role of the BBC, including: broadcaster David Dimbleby; Paul Myners, chairman of Guardian Media Group; and Sir Howard Davies, principal of the London School of Economics.
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