The BBC was accused of living in "fantasy land" after it defended paying six-figure salaries to senior managers and presenters.

Its annual report says more than 100 stars at the corporation earn more than £150,000 while nine celebrities were paid between £500,000 to £1m.

The accounts also showed that 74 BBC senior managers were paid £160,000 or more in 2014 to 2015, up from 66 the previous year.

But Anne Bulford, the BBC's managing director of finance and operations, told MPs senior managers' salaries are "discounted" compared to rival channels.

She told the Culture, Media and Sport Select Committee: "I think these are salaries that are high compared to average earnings, which they are."

But she insisted they are "heavily discounted against equivalent roles in other organisations".

SNP committee member John Nicolson said a lot of BBC staff "pinch themselves at how much they are paid" and accused the corporation of being a "cosy club" which pays its members "a lot of money".

He said: "You think a salary of £450,000 is discounted? This is fantasy land. I think you'll find the average licence fee payer shocked by that."

But James Purnell, director of strategy and operations at the BBC, said: "Relative to people running media organisations, it is very significantly discounted if you compare it to people running Sky or even Channel 4.

"For licence fee payers, the argument we would want to make is the BBC is to be judged on the quality of its output."


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