The BBC "will lose established stars" as it goes through a series of massive cuts, Director General Mark Thompson has warned - while the corporation's top brass will not be exempt from the axe either.
Speaking in Edinburgh, Mr Thompson said "top talent" pay will be reduced, adding: "Sometimes we will lose established stars as a result. When we do, we will replace them with new talent".
The corporation recently lost two of its most high-profile stars, Christine Bleakley and Adrian Chiles, when they moved to ITV.
He also said the number of senior managers would be reduced by at least a fifth by the end of 2011 and the senior management payroll will fall by at least a quarter. He added: "If we can go further, we will and we will look for reductions at every level in the organisation up to and including the Executive Board."
The audience at the James MacTaggart Memorial Lecture were warned to expect "significant movement" on executive pay and told the next round of discussions with the Government about the licence fee "will be a moment for realism".
A large part of the speech at the Edinburgh International Television Festival was made up of a robust defence of the corporation and broadcasting in general, with Mr Thompson hitting back at what he called "exaggerated claims about waste and inefficiency" aimed at the BBC.
The BBC has come under fire from both inside and outside the corporation in recent years. It has been widely criticised for the large sums of licence fee money paid to its stars and top managers. Staff are currently being balloted on whether to take strike action over plans to reform its pension scheme and its rivals accuse it of being overly-powerful.
Last year, News Corporation director James Murdoch used the lecture to deliver a withering attack on the BBC, saying the size of the corporation was a "threat" to independent journalism.
Mr Thompson called for increased collaboration between broadcasters to ensure the future success of the industry. He said: "I don't believe that decline - creative, financial, institutional decline, above all, a decline in the quality of British television - is inevitable." He also warned that every pound taken out of the corporation's commissioning budget is a pound taken out of the country's "creative economy".
In the lecture, called The Battle for Quality, he cited public support for the BBC and referred to the 17 million people who tuned into BBC1 after the general election. He said: "There is still a very strong instinct in this country to come together through broadcasting to share great national moments".