Lord Birt said the licence fee may fall out of favour

He told the Edinburgh International Television Festival he could envisage a time when the current way of funding the BBC loses favour with viewers.

But poorer households would end up the most deprived if the funding moved to a subscription model, he added.

Lord Birt also said BBC Radio 4 would benefit from competition.

He said an alternative to Radio 4 could only be funded by public money.

"There are lots of things about Radio 4 that would have benefited from competition," he said.

"It's a national treasure ...but I'm someone that believes in the benefits of competition."

PM's adviser

Lord Birt was speaking at a question and answer session the day after he had given the James MacTaggart Memorial lecture at the festival.

His first major speech on broadcasting since he left the BBC five years ago had surprised some observers.

"It is vital that Channel 4 is sufficiently well funded to be able to snap at the heels of the BBC MacTaggart Memorial lecture Birt fails to address issues

He had been expected to talk about the future of the BBC and his current role as an adviser to the prime minister, but only made passing references. These were, however, both subjects raised in questions.

Lord Birt denied reports that his current position saw him involved with government broadcasting policy and stressed he had not intervened in the proposals for the Green Paper on the BBC's charter review.

He was also asked whether there could be an alternative way of funding the BBC.

"It would be a sad day," he said. "It may happen in the long term. It might happen because there's insufficient support for public funding."

"It's possible we will lose public consent... but I hope I have made clear that this is not a day that I would cheer."