The comments were made at a lecture last night on the issue of management studies at the Said Business School, Oxford.
Davies, who resigned following the Hutton Report, said he believed the corporation would exercise caution during the government review into the future of its charter and ask for the current £121 charge to stay in place.
However, despite this prediction Davies disagreed with a price freeze. At the event, he cited BBC research that found that three quarters of the population valued the BBC at or above the licence fee.
"I doubt the BBC itself will have the temerity to fly in the face of this misguided tide of chatterati opinion by asking the government for a licence fee settlement in excess of inflation, for fear of being laughed out of court," Davies said.
He aded that there was no other public service in Britain -- not the health service, not the schools, not the army and definitely not the police -- would even contemplate accepting a decade-long settlement in which its income is frozen in real terms.
At the event, Davies also reportedly gave a warning to former rival ITV that it faced severe financial problems due to the rise of multichannel television and increasing popularity of Sky unless it changed its business model.
He said it could find itself taken over by a foreign firm as BSkyB increasingly overshadowed it. He said its business model was a clear threat to ITV.
This prediction was underlined earlier this week when Sky announced it was to launch a 200-channel digital TV and radio package, which will be free to access bar the one-off cost of the box.
Davies said the decline of the ITV made it even more important to protect the BBC licence fee.
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