Union leaders voiced fears of a fresh round of job cuts at the BBC after moves by the corporation to freeze the licence fee for six years in a deal which will see it take responsibility for funding the World Service.
The broadcasting workers' union Bectu accused the corporation of "throwing in the towel" by agreeing to cut its costs by an estimated 16%, including taking over funding of the World Service from the Foreign office.
Sources said the BBC will take over funding of the Welsh language channel S4C as part of the deal hammered out ahead of today's Comprehensive Spending Review which will see the licence fee remain at £145.50.
There had been rumours that the Government would ask the corporation to meet the cost of free television licences for the over-75s at a cost of £575 million.
Bectu general secretary Gerry Morrissey told the Press Association he was "alarmed" by yesterday's development.
"It seems as if the BBC is now doing the Government's dirty work. They have thrown in the towel, so they will now have to justify the cuts to staff.
"How can you cut 16% off your costs without affecting jobs or services? Morale at the BBC is already at rock bottom, but now there is little or no confidence in the management."
A BBC spokesman refused to comment on the story last night.
Foreign Secretary William Hague last month told MPs the World Service could not expect to escape the cost-cutting being imposed across Government and refused to rule out the possibility of some services being lost.
Mr Hague told the Commons Foreign Affairs Committee that the service was of "huge importance" but added: "Can the BBC World Service make itself more efficient and therefore contribute to the spending round? Yes, I think it can and it thinks it can."
The corporation has been locked in a divisive struggle with its own staff over a pensions row and last week it was announced the deputy director-general was being made redundant as the corporation cuts costs.
Mark Byford, who in 2009/10 earned an annual salary of £475,000, will leave next year as the post of deputy director-general is axed.
Its marketing supremo Sharon Baylay is also being axed in the latest shake-up of senior figures.
Ms Baylay, who is paid £310,000, will leave the corporation when her role ends. She joined in May last year.
Director General Mark Thompson warned earlier this year that the next round of discussions with the Government about the licence fee "will be a moment for realism".
He used his James MacTaggart Memorial Lecture at the Edinburgh International Television festival to warn cuts would lead to the loss of "established stars" and a cull in senior management.
Shadow Foreign Secretary Yvette Cooper said: "Although editorially independent, the World Service is a key component of UK diplomacy and does important work promoting British values and open debate across the world.
"Jettisoning it from the Foreign Office at this late stage, without serious consultation or a strategy for its future, is cavalier and short-termist."