A few minutes to 10pm in Studio N6 and the most striking thing is the serenity. Newspapers on deadline often give the impression that everyone is ­scaling some hitherto unclimbed summit. The team behind BBC News at Ten seem more like surgeons about to perform a triple bypass: an interesting and complex operation, but well within their compass.

The studio is barely larger than a decent-sized living room. Inside, there is no cast of thousands: just a floor manager, a cameraman and the newsreader, Huw Edwards. There are half-a-dozen in the control room, a few more in the programme’s corner of the newsroom. It is St David’s Day, and Edwards, very Welsh, is chuntering that under BBC impartiality rules he is not allowed to wear a ­daffodil. He is, I’d say, about 80 per cent joking.

In the nature of TV, he is employed because of his Clooneyesque looks as well as his skill. But, though Edwards is to some extent the star of the show, he is pleasingly unstarry (I catch him primping himself just once, during a Hillary Clinton clip), palpably a British newsreader not a US anchorman, and – though greying and rising 50 – still recognisably the bright, affable boyo from ­Llangennech.

Anyway, the real star of the show is the BBC itself. It is an easy night in the studio (“on the extreme end of calm”, says Edwards). There is no late-breaking news, yet the menu is strong and meaty: war (in Libya), sex (models to illustrate John Galliano’s dismissal; Jane Russell clips to mark her death) and football (Chelsea v Manchester United).

In Libya, there are correspondents such as John Simpson and Jeremy Bowen, men of maturity and judgment who can convey the brittle mood of the country and the iniquity of its suddenly enfeebled leader without ever subverting BBC guidelines. Other news programmes in Britain and elsewhere tend to be either impractically long or convinced that viewers have a three-second attention span. The “Ten” not only has authority, it is a popular ­triumph. For decades, ITV’s News at Ten was one of the top-rated programmes in Britain. But when the commercial network faltered, it started faffing. It gave up the spot, took it back, gave up, took it back. In 2000, the BBC’s most instinctively showbizzy director-general, Greg Dyke, moved his news from its ancient place at 9pm and seized the vacant ground. Now the newses go head-to-head, and the BBC usually wins by about four million to two.

Those numbers are the chief benchmark of ­success for the corporation, as they are for every commercial broadcaster. But the BBC is not a commercial broadcaster. Of all the institutions we will be examining here in the months ahead, it is the most improbable; indeed its existence almost ­beggars belief. Here is a ­publicly owned corporation that does not always do the government’s ­bidding, indeed often irritates the hell out of it; and a nationalised industry that regularly beats its commercial opposition – outsmarting, out-innovating and even out-popularising them. Its endurance is a triumph for British culture and common sense. It is usual to say that Britain has the least worst tele­vision in the world; watching the Ten, that seems like faint praise. This at least is the best.

Are we proud? Are we uplifted? Are we hell! The BBC is in crisis. It is always in crisis. “Nation shall speak peace unto nation,” says its motto. “Morale has never been lower,” seems a more eternal truth. Twice in the past seven years the organisation has been convulsed by public relations disasters: first came Andrew Gilligan’s report on Iraqi weaponry which was excoriated by the Blair government, triggering a chain of events that led to the death of the weapons inspector Dr David Kelly and the ­judicial condemnation of the BBC by Lord Hutton; then came the phone-call prank by Jonathan Ross and Russell Brand.

These sorts of aberrations take place within the context of an organisation running 10 domestic TV channels, 10 UK-wide radio stations, 40 English local radio stations, five more covering the rest of Britain, a website of unsurpassed breadth, the World Service, a portfolio of ancillary operations, plus (a bizarre aberration) the Lonely Planet travel guides. Every week, 97 per cent of the British population consume something of the BBC’s output.

And the upshot of the Kelly crisis was that the BBC’s reputation largely recovered, while those of Blair and Hutton did not.

Now, like most British institutions, it is staring into an abyss of cost-cutting. Director-general Mark Thompson agreed (in two days) a deal with the government last year which froze the licence fee for five years, leading to budget cuts now estimated at 17 per cent. The BBC has always been selectively frugal, as most of us who broadcast occasionally know to our chagrin. The frugality has lately become more widespread, as Huw Edwards notes: “There are far fewer people on this desk than there would have been three years ago.”

And now yet again, the always impoverished World Service – its funding dumped from the ­Foreign Office on to the licence-payer – is in the firing line. This has added exponentially to the atmosphere of gloom that pervaded Bush House – with its army of exiles enduring the grey weather and vile coffee – even in the good times, if there ever were any.

One could certainly suggest areas for cutting. Excluding managerial flab, of which more later, the quantity of the factual coverage has become overwhelming. The BBC responded to the boundless atmospheres of Murdochian airtime on satellite TV by itself offering yet more spurious choice, instead of just being the best. There may be an internal logic to sending 36 staff to Davos or hundreds to the World Cup; it makes less sense to an outsider. And the British press has always accentuated the negative about the BBC, partly out of ­generalised habit, partly out of commercial rivalry (especially for the Murdoch-owned papers) and partly out of horrified fascination, an obsessive jealousy for a means of communication so much more potent than print.

It was a death that set the benchmark for the modern BBC – not David Kelly’s, a fictional one. On the night of September 22, 1955, ITV first went on the air. It was also the night Grace Archer, young wife of Phil in the eponymous and enduring radio drama, met a spectacular and headline-catching end in a blazing barn. It was a message: although the BBC would for many years find it tough holding its own against its vibrant, new and ad-rich rivals, it was not going away; it was not going to retire into minority obscurity as a purveyor of concerts and improving talks – it intended to remain a player. It has never backed away from that.

And as the decades flew, the BBC grew. In 1964 came BBC2 (which provided a crucial scheduling tool that ITV lacked), then colour TV and the fourth radio station, Radio 1, and breakfast TV and daytime TV and Radio 5 Live and digital radio and the web and digital TV. For a long time the corporation’s income stream was buoyed by ever-growing income from the licence fee (the colour licence being much dearer than the old black-and-white one).

Yet it remained a happy-go-lucky, slightly down-at-heel, intensely creative operation. It is of course a myth that all the old programmes were wonderful. And many of those remembered as the epitome of the BBC’s golden age (The Jewel in the Crown, Brideshead Revisited, Upstairs Downstairs) were in fact on ITV. Nonetheless, a lot of great stuff got done – from Shakespeare to Monty Python – and it was done with remarkably little fuss or interference.

As late as the 1980s, drama producers such as Alan Shallcross, who died last month, could and did commission a play over lunch. “When I joined in 1984,” recalls Huw Edwards, “there was very little talk about what things cost.” Into this cosy world, in 1987, strode one John Birt, first as deputy and then, from 1992 to 2000, director-general. He alienated the staff, pleased the politicians and ­introduced layers of managers/bureaucrats to introduce essential cost-consciousness/suffocate the ­creativity with loopy rules and incomprehensible jargon (delete to taste).

There is a school of thought that Birt saved the BBC. The school’s principal is Birt himself, but a good many serious judges are among the adherents. The theory rests on three notions. Firstly, that without his skills as a courtier, Margaret Thatcher would have eviscerated the corporation; this seems improbable – her political position weakened ­rapidly just after Birt arrived.

The second point is that Birt the techie quickly grasped the internet and put the BBC in the forefront of development. This is true but, with an organisation that cannot be judged by normal ­commercial standards, the significance of this is hard to unravel.

The website has now replaced the World Service as this nation’s main means of speaking peace unto other nations (except that, as recent events have shown, it is easier for a tyrant to jam the internet than clunky old short wave). But bbc.co.uk, giving away information free of charge on principle, grew so fast, and so far from what seemed to competitors like the corporation’s remit, that it began to damage the organisation’s reputation as well as enhance it.

“The BBC was a kind of benign menace,” says Emily Bell, former head of the Guardian website and now a professor at Columbia University. “Like a great beast with an enormously long tail. It would turn around, swish its tail and knock you over without even knowing you were there.” She says this admiringly, and gives Birt the credit, for this beast was not a dinosaur. “The BBC was producing the world’s biggest web newspaper before anyone had realised what it was.”

The third point, the internal revolution that Birt unleashed, is far more contentious. “The professionalisation of commissioning was absolutely ­necessary,” says the broadcaster and pundit Steve Hewlett. “The BBC wouldn’t have survived without it.” But there was and is less enthusiasm further down the food chain. Many still share Dennis ­Potter’s view of Birt as “a croak-voiced Dalek”. And the maddest manifestations of ­Birtism live on.

The programme of cuts is being conducted under the Birtspeak slogan “Delivering Quality First”. Paul Lewis, presenter of Radio 4’s Moneybox, pointed out in a letter to the in-house paper, Ariel, that while broadcasters were being sacked, “we are employing lots of people ‘Delivering Quality First workstreams’ who have a ‘sense of excitement’.” He added: “I know what broadcasting is. It’s what the BBC does brilliantly. But DQFW? WTF?”

Other insiders prefer to be cautious and, wishing to survive the cuts, accepted my offer of ­anonymity. “If you were money-orientated, you went to ITV,” recalls one former executive, now an independent producer. “We used to be paid like, say, university lecturers. Vauxhalls in the car park, shopping at M&S, jackets with elbow patches. Then all these BMWs started appearing. Controllers of this, controllers of that. They still didn’t pay much to the people they were hiring but they paid themselves very well. It had a huge effect on the culture.”

There are still many good programmes being made, in all kinds of nooks and crannies, on radio perhaps most of all. But greatness does seem ­elusive. It says something that the BBC’s big festive ideas this winter were a biopic of their old Christmas heroes Morecambe and Wise and a revival of ITV’s Upstairs Downstairs. The cutting edge of global TV is now in the US, especially on the HBO channel. This once seemed unimaginable.

“You can still do a programme on the Etruscans,” says one successful writer, “but they’d want, say, The Pub Landlord doing it. He might be very knowledgeable about the Etruscans, but he’d be the important part, not the Etruscans.

“Producers used to commission on a hunch. Now everything has to go through 48 people. A hunch can’t survive 48 people. You suddenly find yourself talking to someone who’s achieved nothing but is being paid three, four, five hundred thousand. And it affects your relationship to them because you think they must know something, but actually they know nothing.”

“People are generally very melancholy,” says one news producer. “So many of them are now on short-term contracts, and they’re watching their backs all the time. In my experience, almost everyone in News always worked their socks off. Now they’re just scared of making a mistake.”

And yet, as the cuts start to bite on one level, two epic building projects are nearing completion. One is the new £1bn (that’s about three years’ worth of cuts) Broadcasting House. The other, nearly 200 miles north, is MediaCity UK, the BBC’s much-criticised new base in Salford, which is to become the home of Radio 5 Live, breakfast TV, and the sports, children’s and learning departments.

Outside there is a grey Mancunian drizzle. Inside, Peter Salmon, director of BBC North, is banging the drum for this much-criticised ­project. “We’ve always been less popular in the north, and our approval and audience appreciation ratings are lower the further north you go. This has always been ITV’s heartland. We are a universal provider and if you are going to sustain the licence fee, you have to keep trying things to get close to the audience.”

The move will be good for the north-west and good for the country in terms of creating a non-London cultural hub. But that’s surely the ­government’s business. 

The balance sheet for the corporation itself is more complex – there will be obvious problems attracting guests. (It is not quite as mad, however, as the plan to run Question Time from Glasgow.) At least half the staff are refusing to move and, embarrassingly, Salmon’s personal circumstances mean he cannot set an example. One senses an organisation ­neutron-bombing itself: laying waste to its people while leaving a lot of shiny buildings behind.

“The departments that are going were chosen for a reason,” says one well-placed source. “They’re all non-core, bastard children, if you like. When the decisions were taken, the barons of the time fought like crazy to stop the bits they really cared about being exiled.”

“Salford was probably a good idea at the time,” comments Steven Barnett, professor of communications of the University of Westminster and a sympathetic observer of BBC matters. “But it’s an idea whose time has come and gone.”

I was searching for Auntie’s soul, the core of her being. I didn’t find it in Salford, but perhaps I did find it somewhere even less obvious: a small building on the edge of Gloucester city centre, home of BBC Gloucestershire.

Local radio came late to Britain and has always struggled to be taken seriously. In the early days, it was one step up from hospital broadcasting. Forty years on, it has acquired a high degree of professionalism but also many of the BBC’s vices. Even here, top-down managerialism runs riot. The presenters have no choice at all in the music they play: everything is computer-generated using a database of audience-researched tracks. And one of the station’s three senior editors now has to listen in to every moment of live broadcasting and sign off every ­pre-recorded second, the 367-page “Editorial Guidelines” to hand, just in case someone goes rogue Ross/Brand style. Even the jingles are about to be nationally standardised. If a radio genius arose on such a station, a 21st-century Kenny Everett, he would almost certainly be fired within hours. The voice can vary but only within corporate limits. The tone must be bland, chummy, a touch patronising.

Gloucestershire produces 13 hours of programmes every day, and the discretionary budget is precisely zero. “We did pay £600 to commission some local drama,” recalls managing editor Mark Hurrell. “The money came from savings we made in our staff line and I agreed it with the accountant in Bristol.” “It’s always like the week before you get paid at the end of the year,” says his number two, Mark Jones. “It’s perpetually week 51 and there’s nothing left to spend.”

And yet the station’s spirit is striking. Among those I meet are Trish Campbell, the learning ­project manager, who talks lovingly of her work bringing the BBC’s Hands on History project into the community, and Richard Atkins, the faith and ethics producer: “We’ve moved on from the days when a minister would come in and say a few pious things,” he says. “We are trying to reflect the faith life of Gloucestershire. It’s intelligent broadcasting, and we get tremendous feedback from listeners. And this is a fabulous place to work. We’re a team.”

One hesitates to mention this with the BBC in its current mood but such people might do their job for nothing. And they are more important than ever. Commercial radio has been allowed to ­abandon its public service obligations; local news­papers are falling to bits; when the snow is falling, and the traffic is snarling, and the schools are ­closing, the BBC is the one place to turn locally. Just as it has been nationally for every big event since the 1920s.

The nation is lucky to have it. We would be ­luckier still if it were braver, more confident in its own skin, less afraid of being criticised if Huw Edwards wears a daffodil on St David’s Day, less obsessed with buildings and process, and more obsessed with that most elusive of broadcasting commodities: brilliant programmes.

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