Speaking at the Edinburgh Television Festival Mr Birt said he did not recognise the description of the BBC given on Friday by the dramatist Dennis Potter who had opened the festival.
Asked whether he was hurt by the personal criticism, he said: 'I don't think my old mum would agree with much of it. Dennis Potter's speech was powerfully argued, wonderfully poetic and lyrical. But it told a story of the BBC which was bleakly pessimistic and had no basis in reality. We are in a strong and healthy condition.'
Mr Birt accepted that changes in the corporation introduced by him had been painful but added: 'We were an over-large inefficient institution with too much capacity. But the changes have had the impact of putting pounds 100m into programmes which would not otherwise be there.'
For the first time, the director-general alluded in public to his feelings about the personal criticism he has received this year, both over his self-employed tax arrangements - he has since joined the BBC staff - and more recently from the veteran India correspondent Mark Tully who suggested that BBC employees live in fear.
'It's not a lot of fun,' said Mr Birt, 'when these attacks are so personal but you have got to keep your eye on the ball and not worry about what's in the papers.'
When there was a reference to the wealth of executives at LWT following the realisation of share options, Mr Birt turned to Greg Dyke, its chief executive who was in the audience, and said: 'Which would you prefer, pounds 7m or national vilification.'
Mr Birt predicted that the licence fee would be the big issue for the BBC in the autumn and promised that he would be arguing fiercely that its value needed to be retained.
At one point in the discussion a woman working for children's television made an emotional plea for a 'figurehead' to lead the staff 'with the camaraderie we need to go forward'. Mr Birt replied: 'I care very strongly, because of the generation I came from and the time I grew up, about collaborating with colleagues and I have had so many collaborative, creative and fertile relationships.'
But there were jeers when he added: 'I would like to wean the BBC away from bureaucracy. There are far fewer bureaucrats in the BBC now than a few years ago.'
Another questioner said that the BBC was now giving staff self-assessment forms. What would Mr Birt write on his? He replied: 'I would like to say I have helped create an enormously strong management team and that we have seized the initiative in the Charter review.'
He admitted, however, that on programming he was very worried about drama, on British television generally. 'Something has gone wrong,' he said. 'The originality is not there as it was in the Sixties.'
But 'in other areas we are firing on all creative cylinders'. Comedy, with Absolutely Fabulous, One Foot In The Grave, Keeping Up Appearances, and French and Saunders was 'going through a golden period'.
Asked why he and the BBC would not listen more to the public - who appeared not to want a 24-hour rolling news radio and did not agree with changes to Gardener's Question Time - Mr Birt said: 'We do listen. We go to public meetings. We conduct audience research.
'The BBC arouses high passions. There is always a great national debate about what the BBC is doing. We can always do better. The audience says there are too many repeats in the summer and who is to say they are not right? We need the savings to feed back.'
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