The BBC will freeze the licence fee paid by viewers until 2013 to help cash-strapped households, the state-funded broadcaster said today.
The BBC Trust proposed to keep the fee at £145.50 sterling a year, creating an estimated £144m shortfall in the corporation's budget, which it said could be managed without compromising quality.
Under the terms of the agreement with ministers the BBC is entitled to raise the licence fee by up to 2% per year in the couple of years, but has chosen not to do so.
The BBC cited 'the exceptional pressures that the current economic climate is placing on licence-fee payers' for the decision.
The Trust was set up in 2007 to oversee the corporation and represent viewers, who fund the BBC by paying a licence fee.
However, it has been accused by politicians from all political parties of acting as a cheerleader and allowing the broadcaster to overpay its executives and onscreen talent at a time when the public service is having to make heavy cuts.
The Trust asked BBC bosses in June to see whether cost-savings could be made. The executive reported back earlier this month saying some on-air changes would be required, but that cuts could be made.
'A freeze in income will not be pain-free, and this decision was not taken lightly, said Trust chairman, Michael Lyons.
