The British government was warned that it risked hitting Britain’s reputation across the world after funding cuts were blamed for the loss of 650 jobs and the closure of five language services at the BBC World Service.

The BBC blamed changes to the funding of the World Service, which will be paid for by the licence fee from 2014 rather than by the government, and made it clear that the corporation had made a strong case against the cuts.

BBC global news director Peter Horrocks gave the grim news to staff and said they were “clearly very sad”, stressing the importance of the World Service to Britain’s reputation across the world.

People who listened to the World Service were likely to trade with Britain, he said, adding: “We made that case to ministers. We explained in great detail the impact of the decision.” Foreign Secretary William Hague said the BBC World Service had a “viable and promising future” but could not be immune from spending cuts.

Closures to services were to be “regretted” but he blamed them on the BBC pension deficit and Foreign Office spending cuts required by the “vast public deficit inherited from the previous government”.

The World Service confirmed that it will close five of its language services, Albanian, Macedonian, Portuguese for Africa and Serbian, as well as the English for the Caribbean regional service, which will reduce the 180 million global audience by 30 million. More than one in four of the World Service’s 2,400-strong staff will be axed, with around 480 of the job losses going over the next year, with savings amounting to £46 million a year by 2014.

“Such a move will erode the status that the BBC World Service has deservedly acquired over the last half-century as the world’s most credible and global radio network.”

Jeremy Dear, general secretary of the National Union of Journalists, said: “We are pinning the blame for these job losses squarely on the government’s spending cuts”.