Greg Dyke is new BBC boss

Mr Dyke was chosen by BBC governors to succeed Sir John Birt to one of the most powerful jobs in British broadcasting.

The decision was confirmed in a BBC Online chat forum by the BBC's chairman of governors, Sir Christopher Bland, after news of the appointment was leaked by the Conservative Party. Its leader, William Hague, was informed of the decision by Sir Christopher Bland on Thursday afternoon.

Controversy has surrounded Mr Dyke's candidature because of gifts totalling £50,000 that he made to the Labour Party before the last general election.

Controversial appointment

"William Hague has expressed his concerns to Sir Christopher Bland and asked for an immediate meeting with Mr Dyke once he has taken up his appointment," a Conservative Party spokesman said.

A Downing Street spokesman has denied that the government had played any part in the selection process. In a statement, the BBC governors said they were "aware of concerns about Mr Dyke's previous political activities".

"A key part of the appointment process enabled the governors to satisfy themselves through a rigorous dialogue with the candidate that on appointment, he would sever all links with the Labour Party and with commercial broadcasting interests," said the statement.

The post of director general brings a salary estimated at £400,000, but, as Sir John Birt discovered, it can also attract hostile coverage in the rest of the media. Mr Dyke will be in charge of an organisation with an annual budget of £2bn and 23,000 staff.

Challenges ahead

The BBC director general not only heads one of the greatest broadcasters in the world, but leads arguably the most important cultural institution in Britain.

The new incumbent will face the challenges of maintaining the BBC's prominence in the face of a massive expansion of digital channels and international competition. Sir John, the outgoing director general, has launched the BBC into the digital world with new channels and services, but not without the pain of ongoing efficiencies throughout the organisation.

Defending the licence fee and arguing for increases is a battle that remains to be won. Mr Dyke emerged from a field of candidates during the six month selection process, which involved advertising and headhunter firm Heidrick and Struggles.

The five names believed to have been on the final shortlist were Mr Dyke, BBC Director of Television Alan Yentob, BBC World Service Managing Director Mark Byford, BBC News Chief Executive Tony Hall and ITV Chief Executive Richard Eyre.