Britain's government opened the door to a major shake-up of the BBC Thursday, promising to help it thrive in the digital age despite warnings from stars including James Bond star Daniel Craig against cuts.
The broadcaster -- nicknamed "Auntie" due to its once-ubiquitous presence in British homes -- hit back at reform proposals from Prime Minister David Cameron's government warning they would be "bad for Britain".
The BBC is currently funded through an annual licence fee of £145.50 (210 euros, $230) which all British households with a television have to pay. This raises over £3.7 billion per year.
But the government, which published a discussion paper on the BBC's future Thursday, wants to change the status quo before the renewal of the broadcaster's royal charter, due next year.
It could also force the BBC to radically alter its current output, which includes everything from the hit TV show "Sherlock" and reality television to documentaries and news.
"The BBC is a national institution, paid for by the public," Culture Secretary John Whittingdale said as the discussion paper was published.
"It will have spent more than £30 billion of public money over the current charter period. Everyone must be able to have their say on how well they think that money is spent."
He added that the BBC faced new questions about its scope and purpose in the age of YouTube, Facebook and smartphones.
The discussion paper questioned whether the BBC should be producing commercial content such as "The Voice", a singing talent show, and pop music station Radio One, as opposed to more distinctive programming.
The BBC hit back against the paper in a statement, saying it would "appear to herald a much diminished, less popular, BBC.
"That would be bad for Britain and would not be the BBC that the public has known and loved for over 90 years," it added.
Relations between some in Cameron's centre-right Conservative party and the BBC have long been tense, with some MPs accusing the broadcaster of left-wing bias, which it strongly denies.
Earlier this month, the BBC announced it was cutting more than 1,000 jobs in an attempt to cut costs.
This week, celebrities including Craig, Harry Potter author JK Rowling and actress Judi Dench wrote an open letter to Cameron, arguing that "a diminished BBC would mean a diminished Britain."
Some senior figures in Cameron's Conservative party have also expressed concern over the plans.
Chris Patten, a former chairman of the BBC Trust, the broadcaster's governing body, told the House of Lords Tuesday that Whittingdale had "appointed a team of assistant gravediggers, presumably to help him to bury the BBC that we love."
The discussion paper is expected to be followed up with legislation in the next year.