With the 2016 renewal of the BBC's Royal Charter looming, the Corporation is under scrutiny from the Conservative government, and in particular culture secretary John Whittingdale, whose recent green paper called for a fundamental review of its size, what it does and the way it is funded.

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Andrew Marr has been with the BBC since 2000 and is one of the broadcaster's key assets, fronting The Andrew Marr Show on Sunday mornings as well as numerous documentaries – but he, like many, is unsure of its future.

"I think we have two huge issues to resolve," he told RadioTimes.com at the Cheltenham Literature Festival, singling out the future of the £145.50 annual licence fee.

"The problem with the licence fee is that nobody has yet come up with a better alternative," he explained. "Some people in the government have been talking about a household tax instead which is fine but just as regressive and has all the same issues around it."

Marr dismissed any system whereby the BBC took money directly from the government as "unacceptable, because I don’t want to be in a position where politicians will appear on my show and are going to be questioned about something they don’t want to be questioned about but can at any point say to me or any manager at the BBC, 'Do you know what, any more of this and we might have to cut your money a bit'.

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"It's got to come from some kind of general taxation if it's going to be a taxpayer-funded service and it's got to come at arm's length from the government."

Since the publication of the green paper in July, Whittingdale has called into question the type of programming the Corporation commissions and its scheduling decisions – most notably his recent comments querying whether the BBC should air their nightly 10 o'clock news bulletin at the same time as ITV's.

Marr counts the BBC's remit its "second big issue", citing " this terrible dilemma we're always in – on the one hand so-called 'market failure'. The BBC as a public service broadcaster should be doing things that other people don’t do or at least at times that other people don’t do them. Therefore if ITV have got a 10 o'clock news we shouldn’t have a 10 o'clock news. We shouldn’t be doing Strictly.

"Now the problem with that is a lot of the things that we do that come into the non-market failure area are very, very popular, and so I know perfectly well the trap that we’re being set, which is the minute we’re doing the non-popular stuff, they go, 'Oh, far fewer people are listening to you, watching you, therefore we’ll cut your licence fee'. So you can’t win.

"This is a binary choice – we can either be popular or we can be upmarket and abstruse. I think we have to be upmarket and abstruse and sometimes difficult and challenging and do things that other commercial broadcasters won’t do but we must also have the big popular programmes – once you start to unpick that, the whole thing collapses."

Marr went on to discuss the BBC's attempts to take on Netflix by ploughing money into a "smaller number of high quality, high-end dramas which we'll want to sell around the world," but warned "we can't be everything."

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"We can’t be Netflix and the main global news brand and a very popular domestic service. We are being pulled in different directions and very, very tough choices have to be made."

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