BBC facing its toughest crisis yet

It was a bruising clash between the British state and its own broadcaster.

The country was immersed in crisis, protesters were on the streets, and the airwaves were thick with reports critical of the government. Ministers were apoplectic at the coverage, but the British Broadcasting Corporation dug in its heels. The resultant stand-off threatened the BBC's very survival.

Sound familiar? Yet this was 1926, when the BBC was still in its infancy and the general strike was testing the strange, symbiotic relationship between a new state-run broadcaster and a government in turmoil.

Crises have come and gone since then, and "Auntie Beeb" has become a globe-girdling giant with more than 2,000 journalists broadcasting in 40-plus languages. Its reporters are known for their ubiquity, dependability, and no-holds-barred interviews. But nothing has shaken this formidable institution like the recent row between Tony Blair's government and the BBC over reporting on Iraq, weapons of mass destruction, and the justification for last year's war.

The drama has gone to the heart of the peculiar relationship between the government and the BBC. The corporation, though funded by the state, often seeks to show its independence and is often accused of being antiestablishment. Yet experts say that if its funding were pulled and it were cut adrift from the state, it would no longer be able to afford to produce quality investigative journalism.

"It is one of the major crisis in the history of the BBC," says Rod Allen, professor of media studies at London's City University. "The BBC is by and large always in conflict with the government. But it comes to a pretty pass when both the chairman and director general have to resign."

The standoff culminated last week, when a public inquiry effectively ruled in favor of the government, criticizing the BBC for one inflammatory report that alleged that Blair's government had exaggerated the WMD threat from Iraq to beef up its own case for war.

The BBC has been left to lick its wounds, learn its lessons, and contemplate a delicate future in which its role and regulation are in need of redefinition. The two issues to be decided are journalistic and financial. Media watchers are looking to see whether the organization recovers from this blow and persists with the bold and occasionally provocative journalism that so angered Blair; and it remains to be seen how the government will conduct an impending review of the state-financed BBC, including decisions over funding and status, in the light of the recent clash.

Chairman Gavyn Davies and director general Greg Dyke quit last week after the public inquiry led by Lord Hutton criticized the BBC's editorial system as "defective" for first permitting the allegations to be aired and then defending them. Reporter Andrew Gilligan also quit.

But the troika didn't go quietly. Mr. Gilligan insisted in his resignation letter that "the government did sex up the dossier" on Iraq's weapons of mass destruction. Mr. Dyke accused Blair's government of "systematically bullying" the BBC over its Iraq coverage.

BBC journalists were bewildered, angry, and shocked by the outcome of the inquiry. Many walked out in solidarity with Dyke and some clubbed together to place an advertisement in a national newspaper vowing to persist with "brave, independent, and rigorous journalism."

"People certainly accepted that there had been mistakes, but the report was just so one-sided that people just couldn't believe it," says a BBC reporter who used to work for the same news program as Gilligan. He added that journalists were encouraged by polls suggesting that despite Lord Hutton's conclusions, three times as many people trust the BBC as trust the government. "If you look at the polls and phone-in shows, people who still have their doubts are siding with the Beeb," says the correspondent, who did not wish to be named.

The organization has yet to issue new editorial edicts to tighten up on reporting, sources at the BBC say, though some journalists believe that rigorous checks are being applied to more sensitive stories.

But the new direction for the 80-year-old broadcaster will not become apparent until a new chairman and director general are appointed. The chairman will have to try to soothe the exchanges between government and broadcaster while the director general, as editor in chief, will be responsible for looking at news output and determining what, if anything, should be done. "He has to sort out editorial procedures," says Allen. "He has to do something about live two-ways," the practice of journalists interviewing journalists that spawned Gilligan's remarks.

The BBC has already banned staff and freelancers whose main income comes from the BBC from writing newspaper and magazine columns on current affairs.

But Mr. Allen says that the BBC should not be muted or cowed into submission by government intimidation. "The next big test will be how BBC covers the inquiry into intelligence on weapons of mass destruction," which was unveiled by Blair on Tuesday. "If it falters we will be in trouble."

Some media experts argue, however, that the "Iraq dossier" row should provide an opportunity to pull the BBC back from the aggressive stance it sometimes adopts.

Anthony Smith, a media expert at Oxford University, says that some BBC news output has become too shrill, with some journalists taking the quest for independence too far by searching for material with which to pummel the government. "They had projected a model of politics that was wrong, a model that suggested all politicians are crooks, and they are not," he says. "Something has gone wrong with the way it operates and it's the responsibility of the director general to put it right."

Matters are complicated by a review of the BBC's charter, due in 2006. The BBC is funded by a $200 fee paid by everyone with a color television, and this and other aspects of its status could be up for discussion. One post-Hutton poll found that 56 percent of people thought they should no longer have to pay a license fee. Removing the fee would force the BBC to adopt a new commercial model that many fear would be to the detriment of its original mission: to inform, educate, and entertain.

Culture secretary Tessa Jowell said that Lord Hutton's conclusions will impact the charter renewal, though she also stressed that "a BBC that is nobody's lapdog, that challenges government and raises debate - that is in all our interests."