The taxpayer-funded corporation is set to face a 'fundamental' review by Government after bosses were forced to quit over leaked bias dossier
The consultation on the future of the BBC's royal charter, which is up for renewal in 2027, will be launched by Culture Secretary Lisa Nandy before Christmas.
As part of the review, sources have told The Telegraph that wholesale reform of the funding model on the table.
Calls for the BBC to face wide-ranging change have intensified in recent weeks, after a scathing internal memo accused it of several counts of bias.
The most-serious allegation accused the corporation's Panorama programme of doctoring a speech by Donald Trump on January 6, 2021 which made it appear as though he had encouraged violence shortly before the Capitol Riot.
President Trump is now threatening to sue the broadcaster for $1 billion (£759 million) if his demands for compensation and an apology are not met.
Lisa Nandy reportedly has ordered a “comprehensive look at the way the BBC operates” as the renewal of the royal charter comes into focus.
The review is set to focus on providing a “sustainable” funding model and restoring trust in BBC News content after several scandals.
The Corporation has faced a furious backlash over the 'dishonest' decision to edit Trump's speech, with BBC Chair Samir Shah issuing the President an apology for an "error of judgement" after BBC director general Tim Davie and CEO of News Deborah Turness resigned from their roles.
A Government source has told the Telegraph that Labour's major review of the corporation would be “more fundamental than individuals”.
The edit was made public following a leaked memo written by ex-BBC adviser Michael Prescott, which criticised the 2024 Panorama programme about American leader.
Mr Prescott's wide-ranging memo also criticised other areas of the BBC News coverage and was sent in "despair at inaction by the BBC Executive".
Mr Shah said there have been more than 500 complaints since the publication of the memo that raised concerns about the editing of the speech by Donald Trump, adding: “We accept that the way the speech was edited did give the impression of a direct call for violent action.”
The BBC boss continued: "I am absolutely clear that the BBC must champion impartiality. It is more necessary now than ever before."
He said the corporation would need to “hold the highest standards in all our content – video, audio and online.”
The BBC has confirmed it has received Mr Trump's letter and will respond in due course.
Trump's legal action threat comes after Nigel Farage told LBC this morning that the BBC had “deeply offended the leader of the free world.”
Mr Farage went on to say the BBC “has been institutionally biased for decades.”
"If the BBC doesn’t now get a grip, get somebody in from the outside, somebody who has got a history and a culture of changing organisations, of turning them around, then I think what you would see within the next couple of years are many, many millions just refusing, just not wanting to have the license fee," he added.
