A proposal to allow rival broadcasters to bid for BBC licence fee money has been branded "foolish" by a senior MP.
Lord Birt was director general of the BBC from 1992-1999
Labour's Sir Gerald Kaufman was reacting to newspaper reports that the former director general of the BBC, Lord Birt, was backing the plan.
The chairman of the House of Commons Culture, Media and Sport select committee told BBC Radio 4's The World At One the fee was not a "kitty".
Lord Birt, who left the BBC in 1999, is now a Downing Street advisor.
The Financial Times reported on Thursday that Lord Birt had backed the plan, which was originally put forward by Lord Burns.
Lord Burns is chairing the panel looking at the future of the BBC's charter.
He has proposed that the corporation should be regulated by a new external watchdog and not its own governors.
Lord Burns also said the BBC could also give some licence fee money to other broadcasters if it decided the BBC was not fulfilling its role as a public service broadcaster.
Sir Gerald told The World At One: "I think it is foolish and stupid. The licence fee exists to fund the BBC.
"It is a bad, regressive tax and it is accepted grudgingly as the only efficient and effective way of funding the BBC."
He said the money raised was "not there as some kind of kitty for whoever wants to dip into it".