BBC surrenders to commercial pressure to prune its services

Corporation responds to critics by promising drastic cuts to website and radio portfolio

The BBC is planning to cut the scale of its website in half, axe parts of its radio portfolio and sell off its magazine publishing arm in an acknowledgement of widespread criticisms that the size of the Corporation is threatening the future of British commercial media.

A provisional report following a strategic review of the BBC's services led by the director general, Mark Thompson, appears to accept the argument that the Corporation's website, the most popular content-based site in Europe, is far too big. It proposes laying off a quarter of the website's staff.

The report has been drawn up by John Tate, the BBC's director of policy and strategy and a former head of the Conservative policy unit who co-wrote the party manifesto in 2005 with David Cameron. The BBC will be hoping that the proposed concessions will help to ward off a bloody battle with a future Conservative government after repeated Tory criticisms that it fails to give sufficient value to the licence-fee payer. The calculations are based on the assumption that the licence fee will be frozen in 2013, which is the intention of the Conservatives.

The BBC's defenders will see the move as capitulation to political pressure. News of the likely closure of the digital radio stations 6 Music and Asian Network provoked a surge of protest on the internet yesterday. Campaigns to save the stations quickly took off on the social networking site Facebook and were widely discussed on the micro-blogging site Twitter.

The planned cuts come exactly six months after James Murdoch, News Corporation's chairman and chief executive in Europe and Asia, used a speech at the Edinburgh Television Festival to accuse the BBC of making a "land grab" on a struggling media market. "Funded by a hypothecated tax, the BBC feels empowered to offer something for everyone, even in areas well served by the market. The scope of its activities and ambitions is chilling," he said. "Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet."

Details of the reduction in the BBC's ambitions were leaked yesterday to The Times, which is owned by News Corporation, and is at the forefront of Rupert Murdoch's plans to start charging for online content. The subsequent story also coincided with a critical report from the National Audit Office revealing that the BBC had spent £2bn on a series of lavish building projects, including going £100m over budget on the refurbishment of Broadcasting House in London.

The sources of the leaked story may have hoped that Mr Tate's report would be favourably received but The Times responded with a furious and cynical leader. "Big, Bloated and Cunning," was its headline. "Proposals for ostensible reform of the BBC are nothing but a smokescreen." It demanded much deeper cuts including the sale of Radio 1 and the closure of the youth-oriented digital television channel, BBC3.

Many of the BBC's consumers will not see the proposed reforms as a mere smokescreen. "It could be that the BBC are getting in before the inevitable cuts to appease Rupert," commented one concerned contributor to the Digital Spy media website. Others are mystified by the proposed closures of BBC Switch and Blast!, two initiatives aimed at the hard-to-reach teenage audience and previously presented by the BBC as fine examples of public service broadcasting.

There were some positive signals in the Tate report for those who consider that the BBC has dumbed down in order to chase ratings. The cerebral BBC2 controller Janice Hadlow is to be given a further £25m to increase her budget to £450m, while BBC4, the home of much of the Corporation's best documentary programming, appears safe. Around a quarter of the £100m a year spent on buying programmes from abroad is to be cut, although this could threaten acquisitions such as the acclaimed American drama Mad Men, which was ignored by the British commercial sector.

The BBC waited for most of yesterday before releasing a cautious statement saying the detail of its report had still to be agreed.

The Corporation's governing body, the BBC Trust, which asked Mr Thompson to carry out the review amid criticisms of the organisation's spending – much of it linked to executive salaries and lucrative contracts paid to presenters such as Jonathan Ross – said last night that "seismic changes" were occurring in the media industry and the BBC needed to concentrate on its core mission.