The BBC should be regulated by a new external watchdog and not its own governors, an expert panel has said.
Michael Grade is chairman of the BBC's board of governors
The way the BBC is currently governed and regulated is "unsustainable" and needs to be reformed, panel chairman Lord Burns has told the government.
The board of governors currently acts as both regulator and defender of the BBC and the corporation has already said it would make changes to the role.
But Lord Burns said the panel concluded the BBC plans did "not go far enough".
The government commissioned Lord Burns, a former Treasury official, and his panel to look at options for the corporation's future as the BBC's charter comes up for renewal.
The governors' role of keeping the BBC in check while also leading the corporation and fighting its corner was highly scrutinised in the wake of the Hutton affair.
Culture Secretary Tessa Jowell has indicated the need for reform
That led to the resignations of former director general Greg Dyke and former chairman Gavyn Davies.
"There is... a high degree of consensus that the current system of governance and regulation at the BBC is unsustainable, and reform - perhaps radical reform - is required," Lord Burns wrote to Culture Secretary Tessa Jowell.
He said that system "compromises the BBC's independence" and lines of responsibility were "vague and difficult to understand".
And it "lacks transparency, accountability and openness", he added.
Instead, the panel recommended a new Public Service Broadcasting Commission to hold the BBC to account and make sure its services were in the public interest and giving value for money.
It could also give some licence fee money to other broadcasters if it decided the BBC was not fulfilling its role, Lord Burns said.
Ms Jowell has already said the BBC governors must be overhauled, calling the current situation "unacceptable".
The BBC has announced plans to put more distance between the governors and the managers.
Public value test
A dedicated Governance Unit is being set up, independent of management, which will bring in external experts and advisors to evaluate the BBC's services.
Programmes will face a "public value test" and those that fail will be held to account by governors, the BBC has said.
A BBC statement said: "Lord Burns and his panel have carried out their deliberations with intelligence and rigour and we have participated fully in the debate."
The corporation added it was now awaiting the government's green paper, which will set out plans for the new BBC charter, to come into force in 2007.