Tories should ditch BBC licence fee, Greg Dyke panel suggestsBuzz up!

The BBC logo above the main entrance to Television Centre in London.

A review of Tory media policy led by the former BBC director general Greg Dyke will recommend scrapping the licence fee to save more than 100m a year.

Under the proposal, the money the BBC spends on administering and enforcing the 142.50 annual charge would be ploughed into a fund to pay for public service broadcasting on commercial channels possibly including local news. The BBC would still be publicly funded, but its annual 3.6bn income would come from general taxation or via a government grant.

"This is definitely an area that Greg is interested in and thinks needs to be raised and explored," said a review source. "It will be in the report."

The BBC would oppose any attempt to break the historic link between the corporation and the licence fee on the grounds that it would threaten the corporation's independence from the government.

Dyke is heading a panel of 12 senior industry figures including production company boss Elisabeth Murdoch. It was asked to formulate policy proposals on the creative sectors by David Cameron, the Conservative leader, and the resulting report is expected to be published next month.

Dyke refused to comment, but the former BBC, LWT and TV-am boss has criticised the licence fee in the past, describing it as "a desperately unfair tax" in a speech last year. He also argued the availability of TV programmes online would make the charge more difficult to collect.

Cameron called this year for the licence fee to be frozen and has criticised what he claims is BBC profligacy. The Tories have said that they would force the corporation to publish its stars' salaries and limit executive pay.