Television licence fee to be frozen for next six years
The licence fee generates around £3.5bn a year
The television licence fee, which funds the BBC, is to be frozen for the next six years at £145.50, it has emerged.
The BBC will also take over the cost of the World Service, currently funded by the Foreign Office, as well as the Welsh language TV channel, S4C.
There had been a proposal to make the BBC pay the cost of free TV licences for the over-75s, but it is understood this will now not happen.
A formal announcement will be made on Wednesday during the Spending Review.
The BBC is refusing to comment, but insiders say that this is a significantly better settlement than the proposal to force it to pay the cost of free TV licences.
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It will mean a 16% real terms cut in the BBC's funds over the next six years as opposed to a 25% cut over four years if they had been obliged to cover the licence fee costs.
Ministers are expected to present the freeze as "reining in" the corporation's costs, but Gerry Morrissey, general secretary of broadcasting union Bectu, said he was "alarmed ".
"It seems as if the BBC is now doing the government's dirty work. They have thrown in the towel, so they will now have to justify the cuts to staff," he said.
"How can you cut 16% off your costs without affecting jobs or services? Morale at the BBC is already at rock bottom, but now there is little or no confidence in the management."
The BBC has been embroiled in a row with staff and unions over changes to its pensions provision, and last week it announced that the post of deputy director-general was being axed to cut costs.
The BBC Trust earlier warned the government it would fight any move to force the corporation to meet the cost of free television licences for the over-75s.
A trust spokeswoman said it would be "unacceptable" for licence fee payers to foot the bill.
'Cavalier and short-termist'
Last month, Foreign Secretary William Hague told MPs the World Service was of "huge importance" but could not expect to be immune from cost-cutting.
Continue reading the main story “ Start Quote The freeze is welcome” End Quote Lorentz
"Can the BBC World Service make itself more efficient and therefore contribute to the spending round? Yes, I think it can and it thinks it can," Mr Hague told the Commons Foreign Affairs Committee.
But shadow foreign secretary Yvette Cooper said she was concerned about the announcement.
"It is alarming that only 24 hours before the spending review, the funding of the World Service has been completely up in the air," she said.
"Although editorially independent, the World Service is a key component of UK diplomacy and does important work promoting British values and open debate across the world.
"Jettisoning it from the Foreign Office at this late stage, without serious consultation or a strategy for its future, is cavalier and short-termist."
The Department for Culture, Media and Sport currently funds S4C to the tune of just under £100m a year.
Along with the channel, the BBC will also take over the cost of BBC Monitoring, which monitors, translates and analyses media coverage from around the world.
A song released yesterday in support of the BBC is making an impact on several UK music charts.

Stand-up comic  wrote ''I'm Proud of the BBC'' in response to the criticism the licence fee-funded corporation has received from its commercial competitors and the right-wing press. The -led  announced two weeks ago that the licence fee is to be frozen for six years, and that the BBC will take over responsibility from the Foreign Office for funding the . 

The song, loosely inspired by Billy Joel, lists many of the BBC's achievements. Benn, a regular on BBC Radio 4's satirical programme '''', decided to release ''I'm Proud of the BBC'' as a single after realising that it was provoking emotional responses from audiences during his nationwide tour. He told  that the song was receiving standing ovations, and people were wiping away tears. A video was filmed last month outside of ,  and  with a cast of volunteers recruited from the social networking site Twitter.

The song was officially released as a 'download-only' track on Monday. Yesterday's charts reveal that it has reached pole position on Amazon's rock chart, and is listed as the 14th most downloaded track overall. iTunes listed it as the 64th most downloaded song. Fans have created two Facebook groups to promote the single in an attempt to get it to a good position in the , which would force the BBC's commercial rivals to play the track.

Benn says that he has always been a supporter of the BBC, and yesterday compared it to the emergency services. "You also pay for the Fire Brigade, whether or not your house burns down. Public service." He points out that he only receives a small percentage of his income from the corporation; last night he played with his band The Distractions at the  in .