The Government was warned today that it risked hitting Britain's reputation across the world after funding cuts were blamed for the loss of 650 jobs and the closure of five language services at the BBC World Service.
The news sparked anger from opposition politicians and unions and led to warnings of possible industrial action to fight the cuts.
The BBC blamed changes to the funding of the World Service, which will be paid for by the licence fee from 2014 rather than by the Government, and made it clear that the corporation had made a strong case against the cuts.
BBC global news director Peter Horrocks gave the grim news to staff and said they were "clearly very sad", stressing the importance of the World Service to Britain's reputation across the world.
People who listened to the World Service were likely to trade with Britain, he said, adding: "We made that case to ministers. We explained in great detail the impact of the decision."
Former Foreign Office minister Denis MacShane (Labour, Rotherham) said the changes would see "irreparable damage" done to Britain, telling ministers in the Commons: "You are doing in part what no dictator has ever achieved - silencing the voice of the BBC, the voice of Britain, the voice of democracy, the voice of balanced journalism at a time when it is more than ever needed."
Foreign Secretary William Hague said the BBC World Service had a "viable and promising future" but could not be immune from spending cuts.
Closures to services were to be "regretted" but he blamed them on the BBC pension deficit and Foreign Office spending cuts required by the "vast public deficit inherited from the previous government".
The World Service confirmed that it will close five of its language services, Albanian, Macedonian, Portuguese for Africa and Serbian, as well as the English for the Caribbean regional service, which will reduce the 180 million global audience by 30 million.
More than one in four of the World Service's 2,400-strong staff will be axed, with around 480 of the job losses going over the next year, with savings amounting to £46 million a year by 2014.
Mr Horrocks revealed that the Government had been asked to help World Service staff from other countries working in Britain on a visa who may not want to return because of concerns for their safety.
Few people felt safe about returning to countries such as Iran, he said, adding: "We hope that the Government will be as helpful as possible.
"This is a painful day for BBC World Service and the 180 million people around the world who rely on the BBC's global news services every week. We are making cuts that we would rather not be making."
BBC Trust chairman Sir Michael Lyons said it was a "difficult day" for the World Service, adding: "We have no choice other than to live within the reduced Government grant."
Daya Thussu, professor of international communication and co-director of India Media Centre at the University of Westminster, said: "The decision to drastically cut staff and services at the World Service is an unwise move at a time when Britain's influence in the wider world is waning as new actors - China, India, Brazil - emerge.
"Such a move will erode the status that the BBC World Service has deservedly acquired over the last half-century as the world's most credible and global radio network."
Jeremy Dear, general secretary of the National Union of Journalists, said: "We are pinning the blame for these job losses squarely on the Government's spending cuts.
"They will cause irreparable damage to the BBC's ability to cover global news stories adequately. Journalists and other BBC employees are rightly angered at the destruction being caused to a broadcasting service of which the UK should be proud.
"The NUJ will join with other unions in defending jobs and quality broadcasting at the World Service."
Gerry Morrissey, general secretary of the broadcasting workers' union Bectu, warned: "The World Service will be much weakened and people will think less of the BBC and the UK as a result. These cuts are indeed a false economy."
Bectu said it expected calls for industrial action and could not rule anything in or out.
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