The BBC Trust is proposing the UK licence fee is frozen until 2013, which would mean an effective cut of Â£144m (Â172m) in BBC budgets as it foregoes previously agreed increases.
The Trust, the body that oversees activity at the UK public broadcaster, has written to UK secretary of state for culture, Jeremy Hunt, outlining its plan. It said that having consulted with BBC management it has concluded that the Ânecessary savings can be madeÂ.
BBC management, the Trust said, Âmade clear that the loss of Â£144m will require some on-air changes, particularly at a time of continuing capital spend on infrastructure projects and digital switchoverÂ.
In its letter to Hunt, the Trust said that BBC director general Mark Thompson and his team to identify how the budget cut could be absorbed and noted that work continues.
The current BBC licence fee is Â£145.50 and the current settlement was agreed with the previous UK government in 2007.
The news comes in the same week as Sir Michael Lyons announced he would not seek to serve another term as BBC Trust chairman.
He said: ÂA freeze in income will not be pain-free, and this decision was not taken lightly. But the Trust is satisfied that the BBC can manage the impact while continuing to deliver the range of programmes and services that the public loves.Â