The threats were seen by the BBC as part of an orchestrated campaign to intimidate the corporation over its coverage of Iraq's supposed weapons of mass destruction. Another highly placed source alleged that the former cabinet minister Peter Mandelson had sought to negotiate a "deal" which it is believed would have involved the BBC publicly retracting allegations made by Andrew Gilligan, defence correspondent for the Today programme, who claimed in a broadcast on 29 May that Downing Street had altered intelligence reports on Iraq to make them "sexier", to buttress the case for going to war.
The BBC subsequently phoned Mr Mandelson back, rejecting the suggested deal. According to the source: "That's when the not-so-veiled threat was made. Essentially, the meaning was 'we'll throw everything at you'. It was a clear attempt to threaten the BBC's independence by getting us to pull a story we had publicly said we stood behind. The tone of the conversation seemed to be 'retract or else'."
The row comes as the Prime Minister has appealed for restraint in the wake of the death of Dr Kelly. Today, Peter Hain, the Leader of the Commons, accuses politicians, broadcasters and journalists alike of being sucked into a "Westminster bubble" where political debate is driven out by spin and "on-message government boredom".