THE BBC will cover the cost of free TV licences for over-75s in a deal also allowing it to charge for its online iPlayer service, Culture Secretary John Whittingdale revealed yesterday.

He ended weeks of anonymous briefings by telling Parliament that he had reached an agreement with BBC director-general Tony Hall to start making the changes in 2018-19.

The move will see the BBC “play its part in contributing to reductions in spending like much of the rest of the public sector,” Mr Whittingdale said, while further reducing its “reliance on taxpayers.”

But Labour shadow culture secretary Chris Bryant said was it was a “shabby little deal” that would see the BBC’s funding slashed significantly.

And National Union of Journalists leader Michelle Stanistreet said it would “further weaken the BBC’s ability to survive as a public-service broadcaster of worldwide repute.”

Mr Whittingdale also revealed he would reduce ring-fenced spending on broadband improvements from £80 million to zero by 2020.