On the same day that Prince William, second in line to the British throne, accused the BBC of fuelling his late mother Princess Diana’s “fear, paranoia and isolation” by deceptively obtaining an interview with her by disgraced reporter Martin Bashir, a new lobby group launched with the aim of protecting the BBC.

Launched hours before the bombshell Dyson Report into the Panorama interview was dropped, the so-called British Broadcasting Challenge, backed by such luminaries as Armando Ianucci, creator of “Veep,” actor Steve Coogan and feted British novelist Hilary Mantel, aims to persuade the U.K. government to halt its financial squeeze on the BBC and to safeguard the corporation’s world-renowned impartial reporting.

On the first point, they seem likely to campaign in vain as ministers are due next year to fix the level of the next license fee, the BBC’s main source of income.

“I suspect the next license fee settlement will be a very tough one,” a senior British broadcaster told Variety. “The biggest danger coming out of this is not reputational, but financial. The BBC’s brand will reassert itself.

“The government has to be seen to be tough on the BBC, which will be financially constrained for the next five or six years,” said the source.

The British Broadcasting Challenge estimated that the Beeb’s income has fallen in real terms by 30% since 2010 and the advent of Conservative-led U.K. governments. Another cut will likely further constrain what the BBC can do as it seeks to recover from the Panorama crisis.

According to detractors, its journalistic credibility and systems of senior management governance are in tatters following the incendiary report by senior British judge John Dyson, which was set up by new director general Tim Davie to examine how the BBC obtained its 1995 scoop with Princess Diana.

This concluded that Bashir used forged bank statements ‘proving’ that the princess was being spied on in order to persuade Diana’s brother, Earl Spencer, to introduce him to Diana and that he lied repeatedly to BBC executives who then closed ranks to keep his wrongdoing under wraps.

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Pat Younge, former BBC executive and chair of the British Broadcasting Challenge, says the corporation’s latest crisis is “serious but we need to keep a sense of proportion.” Minnow Films/ITV

“[Diana] was failed not just by a rogue reporter but by leaders at the BBC who looked the other way rather than asking the tough questions,” said Britain’s future king.

So how much damage is the BBC’s deception doing to the broadcaster’s global standing? One U.K. media watcher said that “repair work” needs to be done, while a former BBC program maker thought the damage was likely to be “temporary.”

“Reporters have gone rogue on the New York Times,” he added. “Reputational damage is done but then it recovers. People are well aware that this all happened 25 years ago.”

The source suggested it is more significant that the BBC World Service broadcasts 24/7 globally to a high standard.

Pat Younge, the former chief creative officer of BBC Vision, who now co-runs Cardiff Productions and who chairs the British Broadcasting Challenge, thinks it’s important to put the affair into perspective.

Younge insists the ethical breakdown involved in securing the Princess Diana interview was restricted to one division within the BBC.

“Dyson has nothing to report on TV, or sport, or radio or children’s. This was a failure in one program where there seems to have been a particularly toxic culture,” said Younge. “It’s serious but we need to keep a sense of proportion.”

However, Dyson’s explosive verdict on Panorama and the failure of senior management to get to the bottom of what was happening within news and current affairs follows a series of other journalistic failures in recent years, including the BBC’s failure to investigate serial sex abuser and BBC presenter Jimmy Savile.

This led in 2012 to the abrupt resignation of then director general George Entwistle after just 54 days in post.

Many believe there is a toxic culture within the BBC that has led to whistle blowers like graphic designer Mike Wiessler — instructed by Bashir to fake bank statements — being afraid to speak out.

Former BBC chair Michael Grade wants a new independent editorial board overseeing BBC journalism to be set up to ensure nothing like Bashir’s fakery ever happens again.

This may happen, perhaps to show to the world that something has been done to prevent further breeches of editorial straight dealing.

Younge agreed there is an environment at the BBC where whistleblowers are at best marginalized and at worst lose their jobs.

“There are cultural issues,” he said. “It’s largely within news and current affairs.”

While acknowledging that the BBC’s global reputation for trusted, truthful journalism has been undermined by Dyson’s findings, he insisted “the issue must not be turned into an existential threat to the BBC. John Whittingdale, minister for culture in the U.K. government, has said this is not about defunding the BBC and he’s not the BBC’s biggest fan.”

What is also true is that, with the possible exception of the New York Times, no other media organization in the world would devote so much space to such damning self-criticism.

Jean Seaton, a media academic who’s written an official history of the BBC, is convinced that, paradoxically, the organization could end up stronger due to Davie’s determination to get to the bottom of how Bashir got his scoop — and the rigor of Dyson’s report.

“The BBC goes on producing economic, cultural and intellectual value for everybody,” Seaton said. “We’re supposed to be global Britain. People outside the U.K. only know two things about Britain: We have the Queen and we have the BBC.”