The channel that brought Borgen, The Killing and Mad Men into British homes is facing massive cuts as it reaches its 10th anniversary this week.

BBC4, the upmarket digital home of arts, culture and music often seen as the BBC's "most appreciated" channel, may have less reason to celebrate on Friday as it faces a reduction both of its budget and its scope.

Since 2002 the channel has brought viewers some of television's biggest landmarks, from award-winning British comedy such as The Thick of It to imports such as Wallander and Spiral, to say nothing of a succession of "rockumentaries" and influential Storyville documentaries.

Many of the high-profile names who protested last year after rumours that the channel would be axed – including writer Armando Iannucci and the science presenter Jim Al-Khalili – are getting ready to man the barricades again.

"BBC3 and BBC4 combined are where Channel 4 was when it started up," Iannucci has said. "The Thick of It wouldn't have got on as a BBC2 show."

The British comedian, who is about to launch a new American political satire on HBO, added last week: "I hope BBC4 doesn't turn into just reruns of The Old Grey Whistle Test and the 1970 Isle of Wight festival." On screen, the BBC4 birthday will be marked at the end of the week by the The Joy of Disco, an examination of how a style of music defined a decade. Disco at the BBC will also showcase the best archive performances from the genre. Online, however, the 10th anniversary will be acknowledged with growing activity on Twitter and a renewed petition, run by many of those involved in the successful BBC Radio 6 Music campaign, to protect its schedules from attack.

Original drama, an area in which the channel has been acclaimed, is the biggest victim of the impending squeeze, thought to amount to 30% of the channel's budget. Fictionalised biographies of the private lives of women such as Enid Blyton, Margot Fonteyn and Hattie Jacques, and of performers Tony Hancock, Kenneth Williams and Eric Morecambe, have earned praise from critics, while the story of the birth of the country's most enduring soap opera, The Road to Coronation Street, also won awards.

Original comedy, the platform for shows such as the NHS satire Getting On and political sitcom The Thick of It, will also suffer, but the money saved in these areas is to be used to shore up the documentary and archive programming.

BBC4 is the least expensive of the corporation's four main TV channels, costing £54.3m a year, while BBC1 costs £1.1bn, but it is likely to lose its historical documentaries and a third of its science programming, something which has appalled Al-Khalili, who presented the channel's Shock and Awe: the Story of Electricity.

"I think, to try to narrow the remit of BBC4 to be arts and culture to try to compete with Sky Arts … that's ridiculous," he said.

BBC4, while basking in the highest audience appreciation figures of any BBC channel and enjoying its best-ever ratings with 9.8 million viewers a week, also now faces stronger competition from Sky Arts.

Last week the two Sky Arts channels were relaunched with the help of stars including Emma Thompson and Sir Tom Jones, who are to appear in its new original drama strand, Playhouse Presents.

The channels will also move up their electronic programme guide listings and have had their commissioning budget doubled. "We have found a really enthusiastic arts audience, just as enthusiastic as the audience for sport or films, and we have the advantage of being able to make decisions very quickly," said Sky's arts controller, James Hunt. "We like BBC4 and feel there is plenty of room for both of us, but those things make us different from them."

Traditionally, BBC4 has had strong partnerships with organisations such as the British Library and the Victoria & Albert Museum, and is embarking on one with the Southbank Centre in London for a season about classical music in the 20th century, which is based on Alex Ross's bestselling book The Rest Is Noise.

The channel's controller, Richard Klein, said he sees the channel as "mainstream" because he believes it has much more than niche appeal. He is promising it will remain "multi-genre" and that he will work hard to keep the feel that viewers like.

"Arts, music and culture in all its guises will become even more of a focus for the channel, and we are committed to maintaining BBC4's unique tone and range of programming, so there will be plenty more gems in store," a BBC4 spokeswoman said.