The Potter outburst came at the Edinburgh Television Festival two years ago when corporation austerity was at its most severe, the relentless drive for efficiency breeding despair among programme- makers who had hitherto operated with only fluid notions of budgets.
Spool forward two years to the latest annual report, and the corporation appears in rude creative health.
The BBC became the first broadcaster to win five international Emmys and prizes in all three categories of the Prix Italia. It snatched 23 out of 28 Sony Radio awards, 19 Baftas and every Royal Television Society drama gong.
It is also well on course to devolve one-third of its network television and radio production to the regions by 1998, audience share is holding up against stiff competition, while the launch of a fifth national radio network, Radio 5 Live, has been an unqualified success.
Yet talk to some radio and TV programme-makers and there is still a profound sense of discontent. They complain (strictly off the record of course) that the BBC is so controlled by accountants that it is in danger of forgetting what it is there for - to produce programmes.
Mr Birt accepts that not everyone is happy. "To achieve all we have, we've had to put the BBC through the most radical and far-reaching set of changes in its history, and that's been enormously painful for the institution. Six thousand people have been made redundant in recent years. That's hard for any institution, particularly a creative one. I don't blame producers for wanting to be left alone, but that is not an option for us."
The challenge, he says, has been to convince producers that savings have not affected the quality of what appears on screen. Moreover, Mr Birt adds, "we're going to take those resources and bundle them all together to make more programmes - it's called Radio 5 Live, it's called a big increase in drama, it's a huge increase in original programmes."
The corporation has, in fact, passed pounds 80m worth of savings into new programmes. But a piece of revisionism now being circulated is that the Birt reforms went further than needed, that Conservative threats to put the BBC in order were empty.
Mr Birt disagrees: "If we hadn't managed to produce the scale of efficiency savings, the alternative was absolutely gruesome ... There is a great deal of understanding out there about what is a public institution, and if we had not reformed ourselves the way we did, I have absolutely no doubt that the Government would have come in and reformed us as they had reformed other institutions."
The efficiency drive looks set to continue. With the licence fee tied to the RPI, the BBC faces flat income in real terms. At the same time, talent and sports-rights costs have spiralled. Sports rights and BSkyB's buying power particularly trouble Mr Birt. He says BSkyB's income will be double the BBC's by the end of the decade.
"In the end, sports rights holders are going to have make judgements about where the balance of interest lies - is it money or universal access? Politics will also have to decide how far they want this process to go ... But one thing is for certain, the BBC cannot afford to fund sports rights rising at anything like the rate they are now. There is a limit to how much you can pay for anything if the price is rising faster than your income."Reuse content