Will Hutton, the Observer columnist and former Newsnight economics correspondent, has called for an additional levy to fund Channel 4 after digital switch-over.

In a speech he will give this evening (Thursday), commissioned by the BBC, Hutton will appeal for the BBC's licence fee to remain intact. But Hutton, who also chairs the Work Foundation, told Broadcast that there is also a need for PSB plurality and that new money must be sourced to pay for non-BBC PSB output.

For C4, he proposed a licence fee supplement, or a share of funds from BBC Worldwide. “You might have to have a supplement to the licence fee just for C4 of, say,£5 or£10 per household,” he said. “A rather British compromise is the best way to go.”

This week, BBC Trust chairman Sir Michael Lyons attacked the notion of a publicly funded C4. He said increased levels of financial scrutiny would reduce the broadcaster to “BBC5”.

Hutton disagreed, arguing instead that “you'd have one PSB funded from the licence fee, and another from a mix of advertising and a licence fee. It would be a similar model to the French.”

Hutton also called for Ofcom to adopt new, qualitative standards to measure PSB content, expressing fears that contemporary journalism was at risk.

In a forum on the Ofcom PSB review yesterday, C4 chief executive Andy Duncan reiterated that the broadcaster urgently needed funding. “We are cutting programme budgets as we speak - by 2% to 3% in absolute terms,” he said. “It's having an impact now.”

Duncan added C4 would need to revisit the deal struck with Pact over digital media rights in 2006, saying: “We need to evolve the terms as content goes online.”

“People like John Humphrys or Jeremy Paxman couldn't possibly get a career in other news organisations because there's not the same commitment to that kind of journalism,” he said.