Have they lost the plot?

Controversy was always the lifeblood of Channel 4. But now the quality is in question.

These are troubled times for Channel 4. Last week it faced a flurry of complaints over its new gay soap opera, and a stern rebuke from broadcasting watchdogs for too much sleaze.

No surprises there, perhaps.

But as it awaits a ruling - and, possibly, a hefty fine - over a purportedly faked documentary about rent boys, there are some who believe that the station is offending without good cause. They fear Michael Jackson, the chief executive, is using sex because it sells. Forget about public service broadcasting.

The old remit of catering for those not catered for elsewhere has been lost, the critics fear, in a new drive for the channel to succeed in an increasingly competitive market. Sex and the City, the latest in Channel 4's line of American imports, has attracted almost as much criticism as it did advance hype. "ER, Friends or Cheers, it ain't," said one scriptwriter caustically.

And some serious documentary and factual programme-makers, too, feel their work has been downgraded. "They always wanted the Channel 4 `twist', a certain ingredient that would be unusual," said one. "It's now become sex, but they're not being upfront. It's a hidden agenda. They're trying to dress sex up with some kind of legitimate issue."

Of course, Channel 4 has long faced - and even courted - controversy. Michael Grade, Jackson's predecessor, was dubbed "the pornographer in chief" by the perpetually outraged Daily Mail, and there is a fine tradition of programmes calculated to offend the conservative tastes of the National Viewers and Listeners' Association.

Some even offend the watchdogs. The Broadcasting Standards Commission warned last week that broadcasters could not assume a "universal climate of tolerance" and highlighted three Channel 4 programmes as having gone too far. One, Fetishes, featured scenes from a sado-masochistic brothel, while an edition of Eurotrash was criticised for featuring gay men auditioning for porn films. The third was a Cutting Edge documentary where a gay man boasted of mixing Viagra and illegal drugs.

Even suggestions that the channel is failing in its mission are not entirely new. The 1997 Independent Television Commission annual report accused Channel 4 of "losing its innovative edge", of producing no "landmark" programmes or "high peaks" of the type of minority interest programmes it was set up to provide.

Yet speak to people in television, and an unhappy picture emerges of life in the two years of Michael Jackson's reign. The channel is not at crisis point. How could it be with a pounds 350 million budget, healthier than at any time during the cash-strapped 1980s? But there are those who wonder whether Jackson has a vision for the channel. He is transforming the culture and the staffing of the channel. Critics wonder what will be the result.

"He's obviously doing a root-and-branch reform," said a drama maker. Barely any of Michael Grade's executives remain in post. "It's year zero and people are being marched into the yard and given their cards."

As with any new regime, this has ruffled feathers. Independent producers accustomed to dealing with largely autonomous commissioning editors claim their projects are being delayed because all decisions are now referred upwards to Jackson or to Tim Gardam, who came from Channel 5 to join him. Jackson's critics accuse him of "cronyism", using a small band of favoured production companies at the expense of others who were formed to service the station but are now left struggling to survive.

"There is a terrible frustration in the independent sector. The decision- making is so bureaucratic it takes ages to get anything made," one producer said. "The old system was bizarrely eclectic. You ended up with crap things and good things. That's how Channel 4's brand came about - the brand used to be that weird situation where you might see anything."

Eliminating the rubbish might be a justification for the new approach except that the critics believe that the channel is now playing safe, even dumbing down. Despatches, the once-acclaimed documentary series, is now 30 minutes instead of an hour long. Secret Lives, which examined the unknown sides of famous figures, became a "joke in the profession", one documentary-maker claimed, for its obsession with sexual preferences and deviances.

The National Viewers and Listeners' Association views Queer as Folk, the new drama charting the lives of three homosexual men in Manchester, in the same vein. Yet this is almost certainly unfair. First, the series contains just three sex scenes. Second, a drama where the protagonists just happen to be gay is arguably exactly the kind of drama the minority interest channel was supposed to devise.

Programme-makers privately see the much hyped drama as both a sign of the problem and a hope for the future. One called it "a gay This Life," referring to the cult series backed by Jackson during his time at the BBC. "Channel 4 used to be one stage ahead," he said. "Even the dreadful Girlie Show was a year or two before the Spice Girls. Now Channel 4 just seems to be imitating. If you copy, you're one stage behind."

Yet while one in three viewers had switched off before the end of the first episode of Queer as Folk, others are willing to give it a chance as part of Jackson's commitment to drama. The man he brought in to head his drama department is Gub Neal, the ex-Granada man responsible for Cracker.

"Channel 4's record on producing drama hasn't been very good," a drama maker said. With the exception of a one-time investment in the writing of Alan Bleasdale, there are perhaps a handful of dramas deemed successes. But Neal is seen as a sign that the channel is trying to be more original and ambitious. "When you go and talk to Gub Neal, he's a bloke who wants to do something exciting," one drama producer said.

Compared with factual television, the development time for drama can be long, measured in years not months, so the effect of Michael Jackson is yet to be fully seen. But the word among producers is that the man still tipped to return to run the BBC one day is keen to develop more home-grown ERs - "intelligent, middle-brow but funky dramas".

It's all part of what Channel 4 believes is its evolving remit. "When we first came on air 16 years ago, it was very easy for us to be innovative and risky because nobody else was doing that," said a spokesman close to Jackson. "In the current crowded market place - Channel 5, digital, cable and satellite - if you only fill gaps, nobody will watch it."

The channel admits it is striving to be more competitive and retain its share of the audience. While both BBC and ITV suffered lower audiences last year, Channel 4 preserved its 10 per cent of the viewing public.

Yet the spokesman insisted that success did not mean they were copping out of their responsibilities. The problems of social workers are tackled in a forthcoming series, The Decision, while Shanghai Vice, a seven-hour documentary, looks at life in China. Channel 4 News now runs six times a week, and films backed by the channel have garnered 12 Oscar nominations. The spokesman even defended the much-derided Sex and the City, trailed with a high-profile billboard campaign which advertisers estimate cost nearly pounds 700,000. It has won about 2.3 million viewers.

"It is very glib and easy to say that Channel 4 is not what it used to be, but we think what it is now is better. We can't stand still," the spokesman said. "We're in the process of finding out what Channel 4's role should be in a massively different environment. But I can count thousands of things we've got on at the moment that are great."