White Paper on the BBC: Bruised survivor of Thatcherism triumphs: Corporation back in favour after political battle. Maggie Brown reports

THE REAL turning point in the BBC's political fortunes came in January 1991, at the height of the Gulf war. John Major, newly installed as Prime Minister, praised the BBC for its reporting before Parliament.

It was a crucial public signal that the Thatcher years of attack were at an end: public-service broadcasting was back in favour.

The moderate Majorite tone was accentuated when, in 1992, the Department of National Heritage finally published its Green Paper on the future of the BBC. The discussion paper accepted that there probably was no alternative to the licence fee. The BBC heaved a sigh of relief.

Its case, set out with conviction in its 1992 document Extending Choice, was further helped by the flaws of the 1990 Broadcasting Act, which introduced a form of blind auction for the allocation of ITV franchises. The new system, sacking Thames and TV-am, started in January 1993, and has made even extreme right wingers pause for thought.

The BBC yesterday emph asised its role in arguing its own case, the six long years of preparation since the 1988 White Paper on broadcasting, which had proposed stripping the BBC of its night-time television hours, demanded an immediate study on the practicality of subscription and ended automatic index- linked licence fee rises.

But it has also been lucky in timing, escaping the full brunt of Thatcherism and privatisation.

The BBC's fight for the licence fee began in 1984-85 with the Peacock committee report: Margaret (now Baroness) Thatcher hoped it would recommend funding through advertising. But it rejected this option.

However, the BBC faced a series of programme rows and libel writs, culminating in the ferocious attack in 1986 by the then chairman of the Conservative Party, Norman Tebbit, on the accuracy of Kate Adie's reporting of the Libyan bombing.

Marmaduke Hussey was installed as chairman in the autumn of 1986 with a brief to sort the corporation out. By January 1987 he had removed Alasdair Milne as director-general. The following weekend, when the BBC was without a confirmed director-general, members of the Special Branch raided its Glasgow offices looking for tapes about a missile system, the subject of a programme in the Secret Society series, Zircon (which was eventually shown much later).

But the BBC fought back, under Director-General Sir Michael Checkland, who promised to make it more businesslike, and his deputy, John Birt, who has the strategic vision and force of personality to impose large-scale change.

In 1989 Douglas Hurd, then Home Secretary, warned at the biennial Cambridge broadcasting convention that 'the licence fee is not immortal'. This was followed in 1990, by the Government's insistence on an efficiency audit. Accountants Price Waterhouse was not impressed with what it found: the 1991-92 licence fee increase was held at 3 per cent below inflation.

John Birt, in the ascendancy (he became Director-General in January 1993), introduced major cuts in resources in 1992 and won backing for the infamous system 'producer choice', which he brought in in 1993 over the heads of reluctant staff. The system cost 5,000 jobs, but apparently reallocated pounds 100m to programme making. It has certainly impressed the Government.

Patricia Hodgson, director of policy and planning, said yesterday: 'All change is painful, if an organisation can take longer it would be preferable . . . the BBC had no alternative'.

The BBC has also benefited from the realisation that big is beautiful if you want a global role. And it is singing the right tune for the Government with its expansion into worldwide television services with its partner, Pearson, which owns the Financial Times.

Meanwhile, five years of satellite and cable television and rapid commercial radio expansion has shown that the British public retains a keen appetite for BBC programming.

YEARS OF CHANGE AND TURMOIL

1986 - Peacock Committee rejects advertising on the BBC. Marmaduke Hussey appointed chairman of the BBC.

1987 - Nadir of BBC's fortunes as Special Branch raid BBC Scotland. Michael Checkland appointed director general, John Birt appointed as deputy director general to sort out news and current affairs.

1988 - Broadcasting White Paper proposes ITV auction, but recognises the BBC as cornerstone of British broadcasting. Threatens BBC's index-linked licence fee. Wants to strip the BBC of night hours.

1991 - John Major praises BBC Gulf war coverage. Corporation sets up 15 Charter renewal taskforces.

1992 - Green Paper accepts the licence fee is probably best way to fund Corporation. BBC Television admits a severe overspend of about pounds 60m, caused by inefficient accounting. Provokes row over plans for rolling news service on Radio 4 longwave, and a link with BSkyB allowing them access to live Premier League football. BBC sets out convincing vision for its future in Extending Choice: however John Birt provokes dismay when he says its audience will fall back to about 30 per cent by 2000.

1993 - Public consultation overshadowed by row over John Birt's freelance tax avoidance status, poor summer schedule, relying on repeats. BBC caves in over long wave rolling news, opts to dismantle Radio 5 instead.

1994 - Outraged staff hold one day strikes, disrupting news coverage. BBC announces the creation of BBC Worldwide, and partnership with Pearson, after Rupert Murdoch throws the BBC's World Service Television off its Asian satellite service aimed at China.