BBC bosses defended the new EastEnders set project, which ran over budget by more than £20 million, as the corporation faced scrutiny over the future of the licence fee.

BBC Director-General Tim Davie said that while the corporation is “not immune from competitive pressure”, he remains confident about its flagship soap opera following ITV’s announcement of new timings for Coronation Street and Emmerdale, which will see them go up against EastEnders in the schedules occasionally.

Mr Davie appeared before a House of Common’s Public Accounts Committee (PA ) meeting on Wednesday, alongside the BBC’s chief operating officer Leigh Tavazia, who confirmed the project had run in to delays and at a higher cost.

Earlier this month, pictures showed the new set as filming began in Albert Square.

The old set, built in 1984 and due to be used for only two years,  was no longer “fit for purpose”, the BBC previously said.

The investment in the corporation’s longest-running TV serial drama – and wider BBC Elstree Centre – will enable improved high definition for Walford fans.

It has also enhanced filming options, with producers able to explore new areas on screen.

The set was originally due to be finished by 2018 at an estimated cost of £59.7 million but the bill ended up at £86.7 million.

On Monday, ITV unveiled a new schedule for its soap dramas, with Coronation Street moving to hour-long episodes on Mondays, Wednesdays and Fridays at 8pm, and Emmerdale moving to the 7.30pm slot.

EastEnders airs on BBC One with start times throughout the week between 7.30pm and 8.30pm.

Mr Davie said: “We’re not immune from competitive pressure, let’s be honest about it. And you may have a marginal impact or an impact during that hour, but we’re confident that the overall case for the EastEnders development remains strong.

“That whole set wasn’t going to work anyway so it needed investment. We’re also confident about EastEnders as a strand; we’ve just put a new showrunner in there.

“We need to keep investing, doing our thing, and that will deliver audiences that we believe make sense for us, both in terms of linear and iPlayer.”

Mr Davie said the “biggest competition” for the EastEnders audience is not just ITV, but the broader media market.

He said the BBC is seeing a lot of viewers turn to iPlayer to watch big dramas on-demand, with EastEnders one of the most popular shows on a daily basis.

Last week, Culture Secretary Nadine Dorries confirmed the licence fee is to be frozen at £159 until 2024, when it will rise in line with inflation for the following four years.

Mr Davie said: “To deliver public service broadcasting, and a strong public service media, is one of the things we should be fighting for, and we should be proud of in the UK, and is a huge competitive advantage.

“And I worry, actually, that we don’t clock the risk to that. If we dismantle this, I honestly think we’ll be doing a disservice, not just to our culture and our democracy, but also to the economic health of our creative industries.”

Ms Tavazia said work has been completed on the front section of the soap’s new set, with filming already taking place. Viewers should see it on their screens from March.

She said the BBC is “not that concerned” about EastEnders’ clashes with Coronation Street or Emmerdale as it feels its soap has a “more younger-skewing audience”.

The BBC’s chief financial officer Glyn Isherwood also appeared before the committee.