BBC channel aimed at 16- to 34-year-olds turns 10, surviving early controversy over shows such as My Man Boobs and Me

Once pilloried for programmes such as My Man Boobs and Me and ratings so poor that its main evening news programme once registered zero viewers, the BBC's youngest television channel, BBC3, which turns 10 on Saturday, has come of age.

Back in 2003, the channel planned a blockbuster opening sequence featuring Madonna and Ricky Gervais. But the world's biggest pop star was unhappy with Gervais's script (and its prominent use of the word "slut") so the station used Johnny Vaughan from The Big Breakfast instead.

Though the birthday celebrations may be muted, there are still reasons to be cheerful at the channel that gave the nation documentaries such as 34 Stone Teenager Revisited and Fuck Off, I'm a Hairy Woman.

Its short-lived penchant for outrageous programme titles, largely in the middle of the previous decade, was a nadir for the channel, criticised by the BBC Trust and critics such as the presenter John Humphrys, who said it should be axed.

But BBC3 survived successive rounds of cost cutting and built on its reputation for comedy – established early on with Little Britain, satirical animation Monkey Dust, Julia Davis's Nighty Night and later Gavin and Stacey – with Bafta-winning documentary series Our War about young British troops in Afghanistan.

The BBC3 controller, Zai Bennett, now has Channel 4 in his sights. "There is now no distinction between digital and terrestrial in terms of the quality of the shows we make," he said. "Our new comedies now get the same amount of viewers as new comedies on Channel 4."

BBC3 sitcom Cuckoo, starring Greg Davies, and Jack Whitehall vehicle Bad Education launched with about a million viewers. The most popular show on BBC3's opening night on 9 February 2003 was Steve Coogan's Paul and Pauline Calf's Cheese and Ham Sandwich, watched by just over 250,000 people.

The channel's early results were mixed: both Vaughan and its other big-name presenter, Dom Joly, had their shows axed within six months, and a BBC3 news programme at the height of the Iraq war suffered the dreaded zero audience rating.

BBC3 suffered a difficult birth after its remit was initially rejected by the then culture secretary Tessa Jowell, who said it was too entertainment led. The political interference did not end there, according to the programme's launch controller, Stuart Murphy, now director of entertainment channels at BSkyB.

"My view was that the last time the government looked after an entertainment proposition was the Millennium Dome. But we kept on being knocked back until eventually we were able to launch," said Murphy. "The government was saying it wasn't getting involved but that just wasn't true. I walked into the office one time and the DCMS [Department for Culture, Media and Sport] was on speakerphone suggesting various things about what would be on the channel."

If the concept of a standalone channel aimed at 16- to 34-year-olds was radical, then it might have been even more extreme. Senior executives even considered taking advertising on the channel – this was at a time when privatising Radio 1 was also on the agenda – and dropping the BBC branding, calling it simply "3".

It eventually launched a year after the BBC's highbrow digital offering BBC4 ("Everyone needs a place to think") although initially the branding was going to be the other way round, with BBC4 the younger channel and BBC3 its academically-minded sibling.

BBC3's budget has been cut, along with the rest of the BBC, by 20% to about £60m a year, but its future is relatively secure, certainly more so than in 2007 when it was at the centre of the debate over what the corporation should cut to make savings.

With all but one drama a year sacrificed to save money for its comedy and factual output – the current series of acclaimed supernatural drama Being Human will be its last – new shows will include a panel game, Sweat the Small Stuff, hosted by Radio 1 breakfast DJ Nick Grimshaw.

It will also broadcast a mental health season including OCD Camp, about six teenagers and young adults on a week-long treatment course in the US, and will be home to the BBC's coverage of the England women's football team in Euro 2013.

BBC3 averaged 458,800 viewers last year during its 10 hours a day on air, 7pm-5am, only slightly up on its 2011 average of 452,500. Among 16- to 34-year-olds, it had a 5.7% share, against Channel 4's 8.3%.

Ben Preston, editor of the Radio Times, said: "There is a burning need for the BBC to have a channel which talks to people that don't watch terrestrial channels in the way fiftysomethings do.

"BBC3 is increasingly self-confident and imaginative and it doesn't get the press it deserves because most of the press is written by fiftysomethings who don't just don't get it. That's the point of it."

• This article was edited to improve clarity at 00.37 on Saturday 9 February