UNDER the White Paper -- The Future of the BBC: Serving the Nation,

Competing Worldwide -- the Government proposes that:

* The licence fee should be the main source of finance until 2001 --

there must be a review by then.

* A new Royal Charter and Agreement should provide the framework for

its activities for 10 years from January 1, 1997.

* Clear objectives for each of its radio and television services

should be published and audiences consulted on changes.

* The Broadcasting Complaints Commission and Broadcasting Standards

Council should be merged.

* The BBC should develop its commercial activities at home and abroad,

expand programme sales and develop international TV services with

private sector partners.

* Its commercial activities should be distinct from its public

services and not subsidised by the licence fee.

* The BBC's governors should maintain contact with audiences and

approve objectives as well as measure success.

* World Service Radio should continue to be financed by the Foreign

and Commonwealth Office's grant-in-aid.

* The BBC will continue to be editorially independent.

* It will publish a statement of promises to its audiences and provide

information so they can see if these have been kept.

* It should reflect the culture of the whole of Britain and more

programmes must be made in Scotland, Northern Ireland, Wales and the

English regions.

* The Government and the BBC are to explore options for injecting

private finance into the BBC's transmission service, taking account of

its interests in digital broadcasting services -- privatisation is one

option.

THE BBC now has financial security, with licence fee funding confirmed

for the next seven years. The fee -- a colour TV licence costs #84.50 --

brings in about #1.6 billion a year, and currently is linked to

inflation until the BBC's Royal Charter expires in 1996.

The White Paper dismissed other ways of raising the money.

Paying from tax would mean an extra penny in the pound on the standard

rate of income tax or 0.5% on VAT. A levy on the sale or rental of TV

sets and videos would be a burden for businesses.

However, in the long term, it said it might be possible to transfer

some or all of the BBC's services to a subscription system.