An end to repeats has been pledged by Michael Grade

It is "not good enough" that one in 10 programmes currently shown at peak times is a re-run, Mr Grade said.

Answering licence fee payers' questions at its annual general meeting, director general Mark Thompson said plans for 15% spending cuts would improve value.

Governors were also quizzed on chasing ratings, impartiality and accuracy.

'Earn ratings'

The BBC's ability to bring more new programmes and to cut the number of repeats would depend on how much money was available, said Mr Grade.

Licence fee payers had the chance to question BBC governors

Many people found frequent re-runs a "real irritant" added Mr Thompson, but repeating a comedy cost about £20,000, compared to £300,000 for producing 30 minutes of new material.

He also acknowledged that many viewers welcomed the chance to see a show for a second time, but suggested these would instead be broadcast outside peak times, on other BBC channels, or on demand from the archive.

Questioned on whether the BBC had found a balance between ratings and quality, Mr Grade said "you have to earn ratings, not buy them".

Programmes including Strictly Come Dancing, The Secret Agent, Himalaya with Michael Palin and Blackpool showed it was possible to balance "a high level of public service commitment with appeal for large audiences".

'Lot of money'

While acknowledging that the £126.50 licence fee was "a lot of money for many people", Mr Grade dismissed suggestions that advertising would be a better way of paying for the channel and said most people continued to consider the BBC good value.

HAVE YOUR SAY The BBC should not rest on its laurels Martin, Basingstoke, Hants Send us your comments

Balancing the needs of different communities, interests and groups and individuals was a difficult task though.

BBC Two for example, which has seen a decline in audiences, needed to do more to reach more viewers "particularly among younger audiences".

Mr Grade said digital television channels were making good progress, with the children's channels CBBC and CBeebies doing particularly well.

London bombings

The BBC chairman was also asked about the use of the word "terrorist" in news broadcasts, to which he replied the corporation's position on the issue was clear.

"The BBC has been describing them as such... The BBC's coverage has used the word terror, terrorism, terrorist very, very freely on all our major news outlets.

"There was some sub-editing of a couple of pages on the website which I haven't got to the bottom of yet but which the director general I'm sure will tell the governors about."

The chairman said it was not just his view, but one widely shared in the corporation that the bombings could be described as terrorism.

"It is the view of all the BBC journalists and editors. It has been very clearly signalled on all our news outlets."

Mr Grade said the BBC did sometimes act in a defensive manner as it was often subjected to criticism.

2012 Olympics

Appearing before a House of Lords select committee examining the BBC's Charter review earlier on Tuesday, Mr Thompson was also asked about claims in newspaper reports that BBC editors were banned from using the word "terrorist" to describe the London bombers.

Mr Thompson told peers that there was no such "edict".

On the issue of BBC jobs, he told peers he remained committed to plans to relocate hundreds of posts from London to Manchester.

Among those expected to move are Radio Five Live, BBC Sport, CBBC and CBeebies.

Denying claims he was backing away from the plans, particularly following the decision to host the 2012 Olympics in London, Mr Thompson said: "I remain, as director general of the BBC, fully committed to making it happen.