The BBC will not play Ding Dong! The Witch Is Dead, the song being pushed up the charts by anti-Thatcher protesters, in full in Sunday's Radio 1 chart show following the intervention of new director general Tony Hall.

In a fudge unlikely to satisfy either the late Margaret Thatcher's supporters or those attempting to get the Wizard of Oz song to number one in protest at the former Conservative prime minister's policies, the BBC has decided instead to play a "short clip" of the track in a news item in Sunday's Radio 1 chart show explaining why it has suddenly leapt into the top 10.

The BBC has taken the unprecendented step of deciding to insert a news story into the show explaining to younger viewers why a track from a 30s film has made the charts.

Ding Dong! The Witch Is Dead is currently expected to come in at number three in Sunday's official chart for the week.

The corporation said it found the campaign to celebrate Thatcher's death with a song about a witch "distasteful" but that censorship would be wrong.

"The BBC finds this campaign distasteful but does not believe the record should be banned. On Sunday, the Radio 1 Chart Show will contain a news item explaining why the song is in the charts during which a short clip will be played as it has been in some of our news programmes," the BBC said in a statement on Friday afternoon.

Hall said: "I understand the concerns about this campaign. I personally believe it is distasteful and inappropriate. However I do believe it would be wrong to ban the song outright as free speech is an important principle and a ban would only give it more publicity.

I have spoken at some length with the director of radio Graham Ellis and Radio 1 controller Ben Cooper. We have agreed that we won't be playing the song in full rather treating it as a news story and playing a short extract to put it in context."

John Whittingdale, the Tory MP who chairs the Commons culture, media and sport select committee, who was among those calling for the BBC not to play the song, said he thought it was the "right decision" for the corporation to make.

"I would have been very unhappy if the chart show was used as to make a political point, not to mention the issue of taste. On the other hand it would have been odd if it didn't mention it. But putting it into context, I think, on balance, it is a sensible way of dealing with it," said Whittingdale.

The track, credited to Judy Garland, is only 51 seconds long but the corporation's decision to play an even shorter clip is an attempt to keep both sides happy and take the heat out of the situation before it escalates into a full-on scandal.

Radio 1 controller Ben Cooper, in a blogpost on Friday, admitted the decision was "a difficult compromise" given the strength of feelings on both sides. Whittingdale summed up the feelings of Thatcher's supporters when he told Friday's Daily Mail it would be a "serious dereliction of duty" if the BBC had played the song.

The decision comes after Hall, who only started as director general last Tuesday, got involved in the escalating row on Friday, holding urgent talks with Cooper and Graham Ellis, the acting head of BBC radio.

"The decision I have made is not I am not going to play it in full but that I will play a clip of it in a news environment," Cooper told Radio 1's Newsbeat news bulletin on Friday afternoon.

"When I say a 'news environment', that is a newsreader telling you about the fact that this record has reached a certain place in the chart and here is a clip of that track.

"It is a compromise and it is a difficult compromise to come to. You have very difficult and emotional arguments on both sides of the fence. Let's not forget you also have a family that is grieving for a loved one who is yet to be buried."

Cooper said in his blogpost on the BBC website that he found the campaign as "distasteful as anyone" and that he had thought "long and hard about how to respond".

He added that there was "understandable anger" about the campaign but he could not "ignore a high new entry" in a chart show which has been running since the birth of Radio 1 in 1967.

Nobody wanted to "cause offence" to a grieving family, Cooper said, so he had decided "exceptionally" to treat the song as a news item as it was "based on a political campaign to denigrate Lady Thatcher's memory".

He added: "To ban the record from our airwaves completely would risk giving the campaign the oxygen of further publicity and might inflame an already delicate situation."

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