Ian Burrell: Salami-slicing his way through channels, Thompson avoids shutting any down

The smaller BBC digital channels have given us gems from Little Britain on BBC3 to The Alan Clark Diaries on BBC4 – the channel that also introduced us to Curb Your Enthusiasm and The Killing.

But yesterday the BBC elected to reverse a channel strategy that has been growing in ambition since the 1998 launch of the little-remembered BBC Choice, forerunner to BBC3. Under plans revealed yesterday in the plan "Delivering Quality First", BBC3 will move to Salford and make do on 10 per cent less programming budget than it currently enjoys.

The channel, which found its youthful identity under previous controller Danny Cohen, will have to cut back on drama, entertainment and music and yet somehow continue to "nurture talent".

BBC4 has made its name with biopic dramas about such characters as Kenneth Williams, Fanny Cradock and Gracie Fields, but was told to "reduce investment in original UK drama" and cede that territory to BBC2, while concentrating more on archive programmes. Director-General Mark Thompson said he hoped BBC4 would continue to be a global beacon of cultural television, but the harsh reality is that it will operate on a budget reduced by 9.6 per cent.

BBC4 has been a victim of its own success. Its ambition has created problems for BBC2, which has lost identity with the growing profile of its younger sister channel. Hence forward the two will share more content and it will be BBC2 which will be allowed to brand itself "the home of drama".

A similar approach was outlined for BBC radio with Radio 1 digital sister station 1Xtra given a 13 per cent budget cut and made to simulcast programming from the bigger network. Another digital station, Asian Network, must take a 34.1 per cent haircut and stop making dramas and documentaries. Against this backdrop, the BBC's website – growing like topsy earlier in the digital revolution – is having to reduce its budget by 25 per cent.

Mr Thompson defended the BBC's digital strategy, saying the organisation had benefited from having a wide portfolio of channels, a policy which was mirrored by other broadcasters.

He said that since BBC 7 was re-branded as Radio 4 Extra and more closely aligned with Radio 4, it has grown its audience.

But while many smaller BBC brands have been scaled back, none has been shut down.

All of which represents a clever juggling act from the BBC executive, which has delivered a £700m-a-year budget reduction that actually includes a £145m-a-year investment pot to fund priority areas such as Panorama investigations and more coverage of the Proms. It almost makes you wonder if there were more savings to be found.