The BBC would do “very well” if it moved to a Netflix subscription model, the corporation’s chairman has admitted, although he insisted the licence fee will stay.

Sir David Clementi said a change to a subscription-based system would alter the very core of what the BBC represents.

He told the House Of Lords Communications Committee: "The licence fee is at the heart of what we do. It makes a direct relationship between us and the public. That direct link is very important us.

"I actually think the BBC might do very well under a subscription model, but it would not be the BBC you and I know.

"It would be there to serve its subscribers. And the subscribers by their very nature are those who are better off.

"The direct link with the licence fee is, I think, very fundamental to us at the BBC."