The timing of the announcement – which has added to speculation that the ABC's budget will be cut – could not be worse for Mr Turnbull, who has taken pains to distance himself from his colleagues' remarks about cutting, dividing, and even privatising, the ABC. Communications Minister Malcolm Turnbull. Credit:Andrew Meares Mr Turnbull is keen to reassure the public that he is a staunch defender of the ABC and appears uncomfortable with his government's recent attacks on the broadcaster over alleged bias. According to the terms of reference, obtained by Fairfax Media, the study "will seek to clarify costs, provide options for more efficient delivery of services". Full terms of reference can be found here

"The study will focus on the costs of inputs - that is the 'back of house' day-to-day operational and financial operations, structures and processes applied to delivering ABC and SBS programs, products and services. "It is not a study of the quality of the national broadcaster's programs, products and services, or the responsibilities set out in their charters but of the efficiency of the delivery of those services to the Australian public.'' Illustration: Ron Tandberg. The Department of Communications will conduct the study and will be assisted by Peter Lewis, formerly chief financial officer of Seven West Media Limited. ABC and SBS personnel will also form part of the study's secretariat. It will examine all ABC and SBS activities. Fairfax Media understands ABC management is hoping the review will ring-fence the broadcaster from the government's commission of audit.

The efficiency study is scheduled to be completed by April, which makes it unlikely it will have much bearing on the budget. The minister is understood to have commissioned the study so the ABC could make the difficult decisions that have been forced upon commercial media organisations in recent years. There is a view within government that SBS is already running on an "oily rag", but that parts of the ABC's operations are less efficient. While Mr Turnbull has not attacked the ABC over bias, he has complained about outdated work practices at the broadcaster in media interviews and during a December tour of the ABC's Ultimo headquarters. Mr Turnbull, who helped restructure the Ten Network in the 1990s, hinted at the review in an interview – conducted on the ABC – last February. "The ABC's management has to be aware that it has an obligation to its owners, the Australian people, to run this vast enterprise ... as efficiently, as cost effectively as possible," Mr Turnbull told ABC's Lateline program on February 14 last year.

"Every aspect of what this television network does, radio network does can be done much more efficiently because of modern technology," Mr Turnbull added. Mr Turnbull is understood to have been planning the ABC efficiency study since November, and will argue it is a run-of-the-mill assessment of the ABC's spending and work practices, similar to those conducted for any government agency. But the Communication Minister's cautious approach is not being helped by Tony Abbott. On Wednesday the Prime Minister berated ABC News, saying it was taking "everyone's side but Australia's" and arguing journalists should give the navy the "benefit of the doubt" when it came to claims of wrongdoing. Labor's communications spokesman Jason Clare said the study was ''all about providing an excuse to cut the ABC's budget''.

"The night before the election Tony Abbott said there would be 'no cuts to the ABC,'' he said. "If Tony Abbott cuts the ABC's budget it will mean he is a liar, simple as that. "This is also more evidence of division in the Liberal Party. Tony Abbott rolled Malcolm Turnbull for the leadership and now he has rolled him on cuts to the ABC." Acting Labor leader Tanya Plibersek said the timing of the efficiency review was "very suggestive". "I don't know what a efficiency review means, but it sounds to me like cost cutting," she told ABC Radio in Melbourne.

Further pressure piled on the ABC on Thursday when News Corp reported that cabinet planned to strip the broadcaster of its $223 million Australia Network contract. The Australia Network is Australia's international television service, broadcast into 46 countries across Asia, the Pacific and Indian subcontinent. The network, which was established in 2001, is funded by the Department of Foreign Affairs and Trade. In 2011, the Gillard government controversially awarded the contact to the ABC in perpetuity after overruling then foreign minister Kevin Rudd, who wanted the contract to go to Sky News. Sky News Australia is part owned by Britain-based pay-TV company BSkyB, which is controlled by 21st Century Fox, a sister company to News Corp. Earlier on Thursday, Ms Plibersek said the Prime Minister's attacks on the ABC were now escalating into a "petty tit-for-tat exchange" which threatened the ABC's soft diplomacy arm.

"Before the election, the government were very clear that they wouldn't be cutting funding to the ABC," Ms Plibersek said. "And today we read in the newspapers that they're proposing to cut almost a quarter of a billion dollars from the ABC at what seems to be a very petty tit-for-tat exchange with our national broadcaster." In December, ABC chairman Jim Spigelman sought to defend the national broadcaster against attacks from "conservative" critics, announcing a number of external audits to assess any bias in its reporting. Mr Spigelman said he took complaints about bias seriously and was addressing complaints of an "alleged systematic lack of impartiality by certain [ABC] programs and content makers". He said BBC journalist Andrea Wills was preparing a report to "assess the impartiality" of all ABC Radio interviews with then prime minister Kevin Rudd and then opposition leader, Mr Abbott, during the recent election campaign.

A second audit would consider the "treatment of the debate about asylum seekers". Loading Asked last year on ABC television whether he could assure Australians that an Abbott government would not cut the broadcaster's budget in the same way former prime minister John Howard did, Mr Turnbull replied: "What I can say to you is that we don't have any plans to cut the funding to the ABC." Follow us on Twitter