(Adds Director General comments, details from report)
By Paul Sandle
LONDON, July 14 (Reuters) - Britain's BBC came out fighting ahead of a showdown with the newly elected government on Tuesday, saying the views of the public must trump those of politicians and rivals driven by ideological and commercial interests.
Having won an unexpectedly decisive election victory in May, Prime Minister David Cameron's government has set its sights on the 92-year-old corporation, accusing it of holding imperial ambitions that threaten the viability of commercial rivals.
On Tuesday the broadcaster used the publication of its annual report to respond, making clear its determination to take on the government ahead of a 10-yearly review which will take place next year.
"It is the people's BBC not the politicians'," said Rona Fairhead, the chair of the body that oversees the corporation known for such shows as "Top Gear" and David Attenborough's nature series.
The BBC has long been criticised by governments of all political persuasion, and by its rivals who accuse it of dominating the British media and over-extending its original public service remit.
Funded by a licence fee that is paid by all television-owning households, the BBC says it reaches 97 percent of Britons each week, and 46 million people per day.
Its operating costs hit 4.9 billion pounds in the 2014/15 financial year, with staff numbers totalling 18,974, which is seen by some commercial rivals as a luxury at a time of volatile advertising markets and rapid industry change.
In an early shot across the bows, the BBC was ordered earlier this month to take on the 650 million pounds ($1 billion) cost of providing free television licences for over 75-year-olds.
The Conservative government has also questioned whether the broadcaster should be chasing viewer ratings by screening expensive entertainment shows, and it has voiced mounting concern about the scale of its online activities which could challenge those of regional commercial outlets.
On Sunday the government asked an eight-strong panel of executives from the corporation's rivals to scrutinise its remit, and later this week it will publish a document setting out potential changes that could feed into next year's review.
Fairhead, who criticised the government's intervention in the BBC's finances saying it fell "well short of what the public had a right to expect", said the political noise around the corporation was getting louder.
Director General Tony Hall said the broadcaster and the government were facing up to a clash between two different views of the future.
"There is an alternative view that prefers a much diminished BBC," he told reporters on Tuesday.
"It's a view that's often put forward by people with their own narrow commercial interest or ideological preconceptions. I don't support this view, nor does the British public."
Toby Syfret at Enders Analysis said the BBC was facing a range of threats.
With the government in a strong position, and the opposition still in disarray, Syfret said no one seemed to be speaking up for the corporation.
The BBC, which is still grappling with the fallout from a historic child sex scandal, gave further ammunition to its critics, however, by revealing its wage bill had risen to almost 1 billion pounds.
Editing by Kate Holton