Delivering the Royal Television Society's Christmas Lecture, Dyke said the decision to form the BBC Trust was ill-founded and instead a public service broadcasting regulator should be formed.
Labelling the BBC a "500 pound gorilla", Dyke said "quite a lot of us did warn that this system of governance [the BBC Trust] wouldn't work at the time it was created".
He added: "The truth is the Trust is unduly slow and bureaucratic, expensive to run and creates inbuilt conflict within the organisation. It has left the BBC without a supportive board or chairman and the Director General without the "cover" any chief executive needs."
Dyke believes "logically Ofcom should become the regulator of the BBC" but he added that an "of-PSB" could be created and take responsibility for regulating the BBC, Channel Four and any other public service broadcasters.
Meanwhile, Dyke did not relent when reviewing the state of the rest of British TV. Referring to James Murdoch's now infamous attack on the BBC in his MacTaggart lecture at the Edinburgh TV Festival, Dyke said Murdoch's assertion that the BBC operated as a state sponsored media was "laughable".
He said: "James finished his lecture by saying ‘the only reliable, durable and perpetual guarantor of independence is profit.' That has to be a joke coming from someone running an organisation where every single one of its 175 newspapers around the world supported the war in Iraq. Where's the independence there?"
However, Dyke did state support for Murdoch's plan to start charging for content online. He said he agreed "with a lot of what James said in his MacTaggart. He is right about the threat of piracy, I hope News International's bold move in charging on the internet works and pays off."
In a wide-ranging speech on the state of the UK media sector, Dyke warned that Five's future was uncertain. He said that Five has "no real chance "of surviving as an independent channel, adding that it is "just a matter of who buys it or who it merges with and when".
However, he predicted good fortune for Channel 4, which is searching for a new chief executive to replace Andy Duncan. He said new chairman Terry Burns "will add a degree of stability at an unstable time" but warned the big challenge for Channel 4 "will be to work out what Channel 4 is and what it's for in the new world".
This article was first published on mediaweek.co.uk