No one will be able to legally watch the BBC on iPlayer without buying a television licence, the Government has announced, as part of a new Royal Charter for the Corporation unveiled in Parliament.

The move is designed to help the BBC recover the millions of pounds it has lost in revenue by viewers using a legal loophole to watch programmes for free.

However, announcing the change, the Culture Secretary said that in the long run the licence is "likely to become less sustainable" and would have to be overhauled entirely.

Among other changes to the way in which the BBC will be run over the next eleven years announced today:

The BBC will be under a new obligation to provide "distinctive content" rather than just chase ratings. This could affect the Corporation’s ability to buy in hit shows from abroad like The Voice.

The Corporation will have a new obligation to promote diversity with 15 per cent of lead roles going to black and ethnic minority actors by 2020 and 50 per cent of lead roles going to women.

Outside production companies will be able to bid to produce all BBC content for the first time - outside the protected areas of news and current affairs programmes.

The salaries of all stars paid over £450,000 will have to be published – while the BBC’s finances will for the first time be audited by the National Audit Office.

The Corporation will now be regulated by Ofcom rather than the BBC Trust. A new board made up of BBC executives and non executive directors appointed by both the Government and the BBC will run the organisation on a day to day basis.

Under the deal with the Government the BBC will also fund 150 local journalists to cover local courts and council meetings and providing content to local newspapers and websites.

Unveiling details of the new Charter the Culture Secretary John Whittingdale told MPs that the BBC “is and must always remain at the very heart of British life”.

“We want the BBC to thrive, to make fantastic programmes for audiences and to act as an engine for growth and creativity,” he said.

"Our reforms give the BBC much greater independence from Government in editorial matters, in its governance, in setting budgets and through a longer charter period.

"They secure the funding of the BBC and will help it develop new funding models for the future.

"At the same time, these reforms will assist the BBC to fulfil its own stated desire to become more distinctive and to better reflect the diverse nature of its audience.” BBC Director-General Tony Hall, said: "This White Paper delivers a mandate for the strong, creative BBC the public believe in.

"There has been a big debate about the future of the BBC. Searching questions have been asked about its role and its place in the UK.

"At the end, we have an 11-year Charter, a licence fee guaranteed for 11 years, and an endorsement of the scale and scope of what the BBC does today. The White Paper reaffirms our mission to inform, educate and entertain all audiences on television, on radio and online."

Lord Waheed Alli, founder of the Great BBC campaign, said it was clear that Mr Whittingdale had “been forced to back down on some of his wilder proposals” but had showed himself to be “ideologically committed to undermining the BBC”.

“While this (Charter) may not destroy public service broadcasting immediately, it is only right to warn how this can do real and lasting damage the long term,” he said.