Junk the 'trash' man! Will attitude and balls be sacrificed to secure BBC3?

Sonia Purnell looks at what the digital youth channel can do to overcome government resistance and the complaints of its rivals

The BBC is used to getting its own way, and last week's decision to grant it the right to run the UK's terrestrial digital network fitted in with its White City-centric view of the world.

Despite this considerable coup, there remains a black cloud on the horizon for the new, commercially aggressive BBC as Greg Dyke and his team pack their bags for a foreign sun lounger.

Within the next few days the Culture Secretary, Tessa Jowell, is expected to pronounce on BBC3, the digital youth channel she blocked in its original incarnation last September, and which is seen by Mr Dyke as the lynchpin of his aims for total broadcasting domination.

Still seething from her refusal to approve BBC3 – the first time the Government has ever blocked a proposed BBC service – many in the Corporation are confident Ms Jowell will change her mind this time, after an upgrading of its news and current affairs element.

But one well-informed insider has warned that Ms Jowell and her influential special adviser, Bill Bush, a former BBC executive, are still unhappy about the channel's "tacky, trashy offering" for 25- to 34-year-olds. Whitehall is said to remain unconvinced that BBC3 meets its public service remit.

Mr Dyke, too, is said to be concerned that Ms Jowell remains opposed to his "precious baby", and is drawing up a contingency plan to placate her. The sting in this plan, according to several industry sources, may be the sacrificing of the station's contro-versial controller, Stuart Murphy, whose light entertainment fixation in the scheduling has been widely blamed for the minister's opposition.

"Dyke dearly wants that BBC3 licence to deliver the youth audience. The extent to which the entertainment department has Stuart Murphy's ear is deemed problematic by the Culture Department and therefore by Dyke," said one BBC Choice insider.

Still only 30, Mr Murphy crafted both the original unsuccessful bid and the subsequent redraft for BBC3, which would replace his existing digital channel, BBC Choice.

This mercurial, ambitious Corporation wunderkind has presided over a schedule including such programmes as Toilets: Fear, Phobia and Fetish and the Christine Hamilton chat show. Mr Murphy calls it broadcasting with "attitude and balls"; his critics (even inside the Corporation) call it "tacky trash".

Now mostly relying on preview showings of programmes such as Shooting Stars before they go out on BBC2's Comedy Zone, BBC Choice has made little impact and few friends. The Job, a US show starring comedian Denis Leary, has won more favourable reviews for BBC Choice, but sadly its one home-grown broadcasting star, Christopher Price, presenter of Liquid News, recently died from a rare illness.

But despite the pannings of programmes such as The State We're In, a political satire show presented by Jeremy Vine, Mr Murphy has big ambitions. "Stuart has created a culture where the aim is simple: to use his massive BBC budget to beat E4 [Channel 4's youth and entertainment channel on digital TV] at its own game and kill it off," explained one insider. "There are plenty in the Beeb who are distinctly uncomfortable about his approach, and think the BBC should not be in the game of using licence-payers' money to do in the opposition."

There are plenty at Channel 4 who feel the same way, not least because BBC3 would have a budget of £97m against E4's £40m.

Channel 4's fears are fuelled rather than assuaged by the Independent Television Commission report commissioned by Ms Jowell to calculate the likely impact of BBC3 on commercial broadcasters.

The ITC estimates that if it adopted a nakedly "commercial" approach, BBC3 could grab 4 per cent of the TV audience at a cost to independent broadcasters – including Sky One, Channel 5 and Paramount Comedy but particularly to Channel 4 and E4 – of £23m a year in lost advertising. As one Channel 4 source said: "We've just made our first loss, and advertising is already scarce. If BBC3 behaves commercially, rather than as a proper public service broadcaster, and competes head-to-head with us – and we all know Greg Dyke fights to win – then E4 would be less viable. Others would be too. This is a case of BBC tanks being parked on our lawn."

The ITC says concerns about the commercial impact of BBC3 can be overcome by imposing strict conditions on it such as a 90 per cent quota of British programmes, an 80 per cent quota of original commissions, and minimum levels of news and current affairs. With these restrictions, BBC3 would take just 2 per cent of the audience and a "manageable" £7m of advertising revenue, the ITC reckons.

But as one broadcasting analyst said: "Channel 4 is right to be afraid, even if BBC3 is only approved with restrictions. Dyke has got a truckload of public service commitments with BBC1 and just look what he's done to that. Ratings success has become paramount over everything else."

Of course, it would be up to the BBC's board of governors to ensure the Corporation met its public service remit. But these people, drawn from the ranks of the great and the good, bear the sometimes contradictory responsibilities of both regulating and managing the Corporation. As a result, they are often unable to perform either role well, and the BBC's executive almost inevitably gets its way.

The BBC will spend a colossal £6bn of licence-payers' money on realising Mr Dyke's digital dream over the next 12 years. Some £35m of that will be spent every year merely on marketing BBC3 (if finally approved) and its other digital services, such as the arts and culture channel BBC4 and the children's channels CBeebies and CBBC. Some of these networks currently attract so few viewers that an audience of 100,000 counts as an excuse to crack open the champagne.

It is no wonder, then, that independent broadcasters already struggling in an advertising recession complain bitterly about an uneven playing field with the BBC. They can look forward to more sleepless nights in future.