Channel 4 must be "safeguarded" with extra funding so it can compete with the BBC, Lord Birt has said.
Lord Birt said technology remained a challenge for public broadcasting
The BBC must not be allowed to become the only public service broadcaster, he said in his James MacTaggart Memorial lecture at the Edinburgh TV festival.
"It is vital that Channel 4 is sufficiently well funded to be able to snap at the heels of the BBC," he said.
New technology posed a "seismic" threat to public service broadcasters who must "strive with new ingenuity", he added.
Lord Birt, an ex-BBC director general who is now the prime minister's strategy advisor, said the UK's public service broadcasting remained "in rude good health" overall.
He praised factual TV programmes, comedy series such as The Kumars and The Office and entertainment series such as I'm a Celebrity... Get Me Out of Here.
"I like celebrities in the jungle, even if sometimes I haven't the slightest clue who they are," Lord Birt said.
But he urged makers of TV dramas to "throw away the stereotypes" and said political programming needed to show "greater depth of analysis".
He added: "I have a strong distaste for the easy cruelty and the desire to humiliate that marks some part of our national life, media and culture."
Lord Birt said it would be "a tragedy" for Britain if its tradition of public service broadcasting "were diminished or lost".
"Technology has been and will remain at the root of the challenge to public service broadcasting," he said.
Computers, mobiles phones, digital TV and devices such as portable digital music players enabled people to watch or listen to programmes in a wide variety of different ways, Lord Birt said.
"Today's audio-visual consumers have been liberated. They have choice, mobility, convenience, search capability, archiving and interactivity."
Lord Birt said the "awesome challenge" for public service broadcasters such as the BBC, ITV and Channel 4 would be "to reach out to every kind of individual in an interactive media world which will offer an increasingly personalised viewing experience".
But he said that, as the number of TV channels has increased, ITV and Channel 4's audience share has diminished, threatening their status as public service broadcasters.
ITV was "clinging onto the public service tradition by its fingertips" and Channel 4 was in danger of becoming "a pale, frail version of its original self," Lord Birt said.
"As competition intensifies, the channel's ability to invest and take risks in every genre will diminish," he said. "Channel 4 is facing a tide that cannot be held back."
He added: "If we are to have any hope of conserving a splendid tradition, public policy has to maintain the existence of strong public service broadcasters and to promote competition between them."
Lord Birt also called for "rigorous, independently-minded and continuous regulation" of the BBC.
'Vibrancy and strength'
Channel 4 chief executive Andy Duncan said Lord Birt's lecture "captured the vibrancy and strength of our public service broadcasting system".
"Channel 4 shares John's view of the importance of maintaining public service competition to the BBC in the future and Channel 4's critical role in providing that competition as other broadcasters reduce their contributions," Mr Duncan said.
"Despite the strength of our current performance we also share John's concerns about the financial pressures we face in the medium to long term."
Mr Duncan added: "Now is the moment to put in place appropriate measures to help underpin Channel 4's vital public service role for the long term."
The BBC said it welcomed Lord Birt's "support for a creatively strong and well-funded BBC as part of a flourishing UK public service broadcasting ecology".
"Lord Birt has started an interesting debate on key areas of public service content, many of which are at the heart of the BBC's creative future," a BBC spokesman said.