BBC director-general Mark Thompson has described the Government's reported licence fee deal as "a real disappointment".
In an email to staff, he said the corporation would face "some very difficult choices" if forced to accept an increase below the rate of inflation.
"If - and it's obviously a big if - the core of the settlement is as reported, it would be a real disappointment," Thompson said.
"While by no means as bad as some of the leaks and speculation about the settlement in autumn, it falls short of the funding which we and the Board of Governors thought was necessary to deliver the Government's own vision for the BBC which they laid out in the White Paper earlier this year."
Culture Secretary Tessa Jowell is said to have struck a deal with the Treasury which will see the licence fee held below the current retail price index inflation rate of 3.9% for the next six years.
The settlement would be a bitter blow for the BBC, which has been pressing for an above-inflation increase to the current £131.50 fee.
Mr Thompson went on: "The White Paper called for an improvement in existing services, for new digital services AND [sic] for the BBC to play a leading role in digital switchover.
"We argued that for the BBC to do all three, the licence fee needed to grow in real terms - in other words above the rate of inflation.
"If last night's reports are to be believed, the Government is minded to opt for a settlement which hovers just under inflation.
"In practice, that would mean some very difficult choices for the new BBC Trust - and indeed for all of us."
