Saddam Hussein's may not be the only regime that will have been changed as a result of the war in Iraq. The Director General of the BBC, Greg Dyke, may also find himself out of a job.

I suppose I would be accused of exaggeration if I gave in to the temptation to wonder which regime change might have the better effect on the world's quality of life.

The immediate danger to Mr. Dyke is posed because he has staked his reputation on winning a bitter row with Downing Street over a news story that alleged that Alastair Campbell, Mr. Blair's director of communication, "sexed up" a report on Iraq's weapons of mass destruction. Mr. Dyke is going to need great deal of luck to keep his face clear of egg, because the story looks less and less likely to have been true every day.

The report depended on an allegation made to the BBC by an unnamed source in the British intelligence community, to the effect that Mr. Campbell had added a sentence to one of the Iraqi WMD dossiers, indicating the Iraqis could launch a nuclear strike on 45 minutes notice. The BBC story suggests Mr. Campbell invented this piece of information.

The story came from a single source, who was unwilling to be named. In journalism, publishing a charge as serious as the BBC's without getting a second source to vouch for its truthfulness is highly unusual. The policies of most news media, big and small alike, forbid it - the Washington Post would not have published many of the stories Woodward and Bernstein wrote about Watergate had they not been verified by the mysterious source known as Deep Throat.

There were two additional reasons the BBC should have hesitated to run the story. First, they had been given a lesson in how dangerous single-source allegations are only last year, when a story they ran alleging that a mining company called Oryx was funding Osama bin Laden cost them an apology, nearly ?1 million in damages and costs and the embarrassment of having to use the very thinnest of defences in court.

Second, the story came from the Today programme's defence correspondent, Andrew Gilligan, who will be well known to anyone who paid attention to the BBC's reports from Iraq during the war. He was the character who, for example, as the war reached its closing days, announced on BBC TV that he was at the Baghdad airport and the Americans, despite what they had said, were not. He was mistaken, of course, but for the rest of that day, he and other BBC correspondents filed story after story casting doubt on the veracity of the claims of US forces, despite indisputable evidence of their mistake being carried elsewhere. News organisations more inclined to be careful of their reputations for accuracy would have quickly dismissed any reporter who was quite so spectacularly and, apparently, perversely wrong. The BBC seemed not to notice.

In the case of the sexed-up dossier, Mr. Dyke has chosen to back Mr. Gilligan. And he has been joined in his denials of wrongdoing by the BBC's chairman, Gavyn Davies.

In truth, the story represents only the immediate danger to the BBC. It must be seen against the background of an extraordinary and quite sudden change in the BBC's service to the UK and the world community.

Once, the BBC embodied the eccentric, but sophisticated and responsible way the British people have of looking at the world. Their newscasts were the fairest and most carefully put together on the air. Their programmes, whatever they concerned, might sometimes be a little obscure, but were always intelligently put together, and always shone a welcome light on a normally shadowed subject. One had the impression that the BBC was controlled by some terribly wise old Oxbridge don who could be relied upon to be correct about everything, and who knew more about the way the world was put together than any other being on earth.

Suddenly, though, the old Oxford don seems to have been replaced by someone very much younger, most decidedly less knowledgeable and with an astonishingly smug view of the correctness of his, or her, political opinions.

Janet Daley, writing last week in the Daily Telegraph, seemed to me to have captured the new BBC beautifully: "… the BBC has itself become a political force in the land, with its own internal, incestuous, self-reinforcing culture, and a deeply entrenched set of received opinions," she suggested.

"The axioms of this institutional wisdom are quite explicit, but so universally held as to be virtually invisible to those within the system. Although the detailed strictures of the orthodoxy vary over time, they are always Left-of-centre and, for the most part, to the Left of New Labour, although they are not identical with Old Labour except in a vague sentimental sense …

"This framework of belief is not regarded as ideological or dogmatic by BBC personnel (which is why they are so hurt and bewildered by the charge of political bias), but simply as the limits of sanity, or at least of civilised discourse.

"What is most disturbing about encounters with BBC current affairs people is not that one has disagreements with them, but that they regard their own quite narrow frame of reference as the only rational one.

"Any party, politician or pundit who does not accept this consensual package will either be ruled out of the debate entirely or treated like a maverick side-show - a bit of a comic turn who is outside the boundaries of serious consideration.

"There isn't their opinion and your opinion, there is your opinion and you're insane. Making out a moral case of low taxation is not regarded as a contentious contribution to political argument, but as ludicrous raving - a flat-earther's fit of extremist nonsense.

"As far as the BBC is concerned, the notion that freeing markets might produce more equitable and beneficial circumstances for more people more of the time is simply off the register: it is not just wrong, it is crazy and malign.

"Reasonable people - the sort whom corporation staff know and socialise with - simply do not think that way."

As part of its set of beliefs, the Corporation seems to have decided that the US and its allies are an evil force in the world. One astonished American said, after listening to BBC News recently: "Why, the BBC might as well be French!"

But the BBC's mistakes are beginning to catch up with them. Some examples, chosen more or less at random:

The Corporation was forced to admit in May that the moderator of a discussion about a Roman Catholic cardinal and an alleged paedophile priest had displayed bias in his handling of those interviewed.

The Editor of the Today programme, Ron Liddle, admitted in February of this year that he had been forced by his superiors to sack the author Frederick Forsyth, the novelist and commentator, because they didn't like his right-wing views.

The station was accused of airing "KGB propaganda" after the writer of a drama about the Cambridge University spy ring - Kim Philby, Guy Burgess, Donald Mclean and Anthony Blunt - admitted that he had invented several key scenes. The inaccuracies were highlighted by Oleg Gordievksy, the former KGB colonel who escaped to Britain in 1985 after a decade of working as an MI6 double agent, when he said that the programme was littered with so many falsehoods that it "resembled an official KGB textbook".

Col. Gordievsky said that the makers appeared to have distorted the facts to present the spies as idealists whose commitment to communism should be admired, rather than as traitors who were responsible for the deaths of numerous British agents.

Mr. Dyke himself is said to have apologised this week (albeit in a private meeting) to Theresa May, the Tory Party chairman, because of the BBC's coverage of local elections in Britain in May when, despite some very substantial Tory gains, the BBC managed to give the impression, not only that the Tories had lost, but that they thoroughly deserved to lose.

The Government of Israel last week announced that they would have no further official dealings with the BBC because of their anti-Israeli bias in coverage of news in that part of the world. The Israelis obviously feel that life will be better - and fairer - without the BBC.

The BBC occupies a unique position in Britain's life. It is a Government-funded organisation. The British people, those who own a television set, that is, are charged a licence fee to watch its programmes - a fee that has just gone up to ?116 a year.

On this side of the Atlantic, people will believe that the only thing that is going to cure the kind of arrogance that seems to have gripped the BBC recently is a big dose of competition. It may not be long before the British themselves come around to that way of thinking.