Advisers to interim Prime Minister Ehud Olmert recommend closing down Channel 1 and creating a new public television station. Their plan calls for appointing attorney Eli Zohar to liquidate the Israel Broadcast Authority (IBA) in its current format. Uri Shenar, the former head of Channel 2 franchisee Keshet, would be in charge of creating the new organization.

The plan, which would involve the loss of 1,000 IBA jobs at a cost of hundreds of millions of shekels, has the support of the treasury's budget division. Olmert has not yet approved the program.

Olmert's aides have told Haaretz that the interim prime minister has not ruled out any ideas that would strengthen public broadcasting.

"If someone proves to him it's possible to close IBA and reopen it immediately, he'll go for it," one aide said. They emphasized that any plan to eliminate public broadcasting would be rejected outright.

The replacement for Channel 1 would be set up according to the recommendations of the Dinur Commission, appointed by Olmert in 2004 to recommend IBA reforms. The aim is to separate public broadcasting from partisan politics and ensure its independence. The commission also recommended turning the IBA from a production house, which creates most of its programming in-house, to a broadcast house, which commissions most of its content from external sources . News and sports programming would remain in-house. In addition, a separate Arabic-language channel would be established.

Mortal blow to Israel Radio

The issue of what to do about Israel Radio, which operates several radio stations, has not been thoroughly addressed. The radio division not only supports itself but also helps to finance the IBA's television operations, and it does not need major reforms. Observers fear that closing down IBA could drive away radio listeners and deal a mortal blow to Israel Radio.

Another fear is that once Channel 1's broadcasts end, business interests and treasury officials who do not value public broadcasting will wield their influence and prevent the renewal of broadcasts under the refigured format.

In addition, while the Finance Ministry has agreed in principle to underwrite severance packages for the workers who will lose their jobs, no one can predict how much this will cost.

Ironically, it is Olmert himself, whose associates insist is committed to high-quality public broadcasting, who is largely responsible for the poor state of the IBA today. His long battle to get rid of Yosef Barel as IBA director-general based partly on personal antipathy left the organization without a permanent director-general or chairman, without a board for several months, and on the verge of financial collapse.

In addition, Olmert is responsible for appointing the new board, which is studded with political appointees linked to the Likud. (The appointments were pre-Kadima).

Immediately after Barel left, Olmert told Haaretz he was committed to bringing about change at the IBA, but he has taken a hands-off approach since then.

There seems to be broad support across the political spectrum for a "revolution" in the IBA. Its own financial officials are predicting an NIS 160 million deficit for 2006, resulting from a cut in license fees, a drop in advertising and increased spending. It does not include the IBA's cumulative debt.

"If a public body could go bankrupt," a source at the Prime Minister's Bureau said, "then you could say the IBA is very close to it."

Ra'anan Dinur, director-general of the Prime Minister's Office, said: "At this stage no decision has been made about the IBA. The prime minister will be presented with various options for the future in the light of the IBA's crisis."