S4C: Public Bodies Bill amendment defeated in Lords
The UK government has defeated an attempt in the House of Lords to limit ministers' powers to change the way S4C is run.
The former Plaid Cymru leader, Lord Wigley, tried to water down the role of ministers in the new-look S4C once it forms a partnership with the BBC.
But his amendment to the Public Bodies Bill was defeated by 197 votes to 162, a government majority of 35.
The government said S4C's inclusion was important to protect its future.
However, it did try to re-assure peers who fear that the channel will lose its independence once the BBC is largely funding it.
It accepted an amendment from the former Welsh Office Minister Lord Roberts of Conwy that he said would allow the ability to create an effective management structure that would guarantee a strong future for Welsh language television.
In a letter to peers released before the debate, the Culture Secretary Jeremy Hunt wrote: "I must also make it clear that the government has no intention of removing S4C as a statutory body or merging it with the BBC.
"S4C's current public service remit, as enshrined in legislation, will remain and the secretary of state will continue to exercise powers of appointment over the chair of the S4C Authority.
"The BBC's relationship with S4C will be on the basis of a partnership and not of a BBC subsidiary."
Lord Wigley told the Lords: "S4C should never have been in this bill, the independence of S4C is critically undermined as it will be beholden to the BBC Trust for the bulk of its funding, which the government without prior consultation have moved to the licence fee.
"S4C will be at the mercy of the BBC Trust for its resources."
But former BBC chairman Lord Grade, now a Conservative peer, said: "I have to tell you from where I sit and from my experience S4C occupies the most privileged position in British broadcasting that it is possible to imagine.
"The idea that a greater level of accountability and transparency is being introduced seems to me to be perfectly reasonable."
He said the BBC Trust was the best guarantor of independence.
Talks are continuing over the details of the new arrangements.
In his letter, Mr Hunt said the new governance structure will be enshrined in a dedicated agreement between the Secretary of State and BBC.
Former Labour Welsh Secretary Lord Morris of Aberavon told BBC Wales of his concerns about S4C's future under the new relationship with the BBC.
"The BBC will consume S4C, the man who holds the bag of gold always has the final say, and if the money comes from the BBC then it's just a matter of time for the continued existence of S4C.
"We all know the story of Jonah and the whale.
"The whale consumed Jonah, and that's what always happens to the smaller creature.
"The BBC is so big, there's a battle every year, from every corner for money.
"S4C will have to fight it's corner, and I can see in future the thumb of the BBC on the throat of S4C."
From 2013, S4C will be funded from part of the BBC licence fee.
BBC Wales has said the decision was the UK government's.