BBC chairman Michael Grade said that "The status quo is not an option," as he and director-general Mark Thompson laid out the BBC's agenda for change.
The 135 report 'Building Public Value: renewing the BBC for a digital world', which has already been derided by commercial rivals, is the BBC's contribution to the Department of Culture, Media & Sport's consultation on the BBC's 2006 Charter Renewal.
One of the key areas the report covers is governance, which goes to the heart of the BBC's problems in the last few months after it was savaged by the government and the Hutton Report.
The BBC said it will create a separate governance unit that is independent of its senior management.
Director-general Mark Thompson said: "We are launching an agenda of radical change for the BBC. Change to take advantage of the digital revolution, but also change to make the BBC more responsive to its owners, the British public."
On the tricky issue of the licence fee, the corporation said the majority are willing to pay and many would pay as much as £240, or double the current licence fee, rather than lose the BBC.
The BBC is said to be looking for an increase in the fee, but many doubt that it will get a significant rise.
Part of its plans include modernising the way it is collected to cut costs and making it more affordable for the less well-off, as well as aiming to reduce overheads to 10% of expenditure, which could see more job cuts.
On programming, the BBC plans to address the criticism that the corporation has suffered for its drift towards ratings-changing programmes.
The BBC said it would restore serious current affairs on TV, particularly on BBC One, and revive drama on radio and TV, including single dramas, and develop comedy as part of a unique BBC strength with more investment.
"I want a BBC that delivers wonderful programmes that offer something of value to everyone," Grade said.
One of the BBC's biggest critics Kelvin MacKenzie questioned the BBC's public-service ethic and asked where it was in some of its programming.
"Where does the word 'public service' come in 'EastEnders', the Lottery or 'Strictly Come Dancing'? They are called entertainment. Entertainment is supplied by lots of different outlets in the commercial world and can be supplied for nothing."
The BBC said it was also to increase its film output, with a commitment to make up to six to eight films a year, and there is to be more investment in digital arts channel BBC Four and a more prominent place on BBC One and BBC Two for culture programming.
The nine-point plan puts a particular emphasis on the role the BBC can play in a digital Britain in the run-up to the 2010 switchover. The report says that broadband is the key to turning the BBC's content in to a truly public resource.
"We look forward to a future where the public have access to a treasure house of digital content," Thompson said.
To reflect that the BBC represents the whole of the UK, it has committed itself to have 50% of its public service employees based outside London over the next 10 years and to invest £1bn outside London over the same time period.
Part of that calls for building Manchester as the largest broadcast centre out of London, but it could mean job cuts as well.
Public value is another core area of the report and will be given a much higher place in the future of the BBC, the report said.
BBC Governors will now apply a test of public value to all the BBC's activities, to assess what the BBC should and should not do, using a set of measures including: reach, quality, impact and value for money, as well as the economic value and potential market impact.
"Some of these measures are quantitative. But some are unashamedly qualitative. At some point, assessing public service broadcasting does have to be a judgment call," Grade said.
As th UK's biggest broadcaster and the world's largest public service media group, the BBC said it planned to continue to support the UK's global role by providing trusted and impartial news and information, as well as showcasing the best of British culture and talent.
Part of that plan will see it extend the reputation of the World Service and establish a firmer financial footing for BBC World.
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