The review was ordered by culture secretary Tessa Jowell ahead of the renewal of the BBC's Royal Charter in 2006. It is looking at the BBC's spend on websites, including the popular bbc.co.uk/news, and whether or not it has had an adverse effect on commercial websites.
Part of the BBC's defensive strategy includes a report it has commissioned from consultancy KPMG to examine the effect its online properties have had on the commercial world.
According to a report in the Financial Times, the BBC is countering the claim that it has adversely affected commercial sites by arguing that its online activities have actually helped commercial ventures by encouraging users to go online.
However, Ashley Highfield, director of new media and technology at the BBC, admits: "There is a case that we take eyeballs away from some sites that do have advertising. KPMG reckons the total amount of advertising we take away is £4m."
The commercial sector argues that the BBC spends far more than the original £21m budget it was given by the government in 1997 and 1998.
The BBC spent £73m on web activity last year. It has said it welcomes recommendations from the government review that would help define its online remit.
The online review will include public consultation and will examine how BBC Online has met the objectives set out for it when it was funded, assess its market impact and analyse its role as part of the BBC's overall service.
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