BBC in drama of 21st century media

By Kate Holton

LONDON (Reuters) - Having angered Queen Elizabeth and the public, Britain's BBC is set to shed staff with sweeping job cuts this week in the biggest crisis to hit the world-renowned broadcaster since a government clash over Iraq.

The publicly funded corporation, known for its excellence in journalism, has seemingly stumbled from one crisis to another this year, damaging viewers' trust and its credibility.

On Thursday, Director General Mark Thompson is expected to announce plans to cut up to 2,800 positions due to a tighter budget, with news and factual departments to bear the brunt.

Staff and unions have warned the quality of its output will drop. Its bbc.co.uk/news Web site, which it says attracts about 35 million users a month from around the world, will also be affected, according to media reports.

The result is plummeting morale and questions over strategy.

"The mood is shocking," said one member of staff, requesting anonymity.

But not everyone is convinced by the tales of woe.

The broadcaster, which does not carry advertising, dominates the British media scene, drawing mass audiences to its main television channels and regularly setting the news agenda.