The BBC’s director general said he was not giving up on demanding the £200,000 paid to Huw Edwards after his arrest last year, adding the corporation may have to “get tougher” and stop paying its staff if they were suspended.

Tim Davie, who appeared before the House of Lords Communications and Digital Committee, also acknowledged that it would be difficult to legally recover the hundreds of thousands of pounds if Edwards failed to do so.

“We have made a formal request and discussions are ongoing,” Davie said. “The BBC’s position is clear, the money should be repaid and we have made the request. We expect progress and a response. We will explore (legal recourse) but that is a challenge. Our position is clear, we have made the request and that is our position.”

Edwards, who is due to be sentenced on Monday after admitting accessing indecent photos of children as young as seven, continued to receive his full salary until his resignation in April, despite the company being informed of his arrest on “serious allegations” the previous November.

“The police gave us very clear instructions to keep the matter confidential,” Davie said. “It was not an easy decision, it was really difficult to get the balance right. There was an arrest but there was no charge. You can take risks and violate your policies. That can bring legal risks and significant risks to the welfare of those involved. The decision I stand by remained suspension and that is the decision we made.”

Davie said that given the impact of the decision to continue paying Edwards, the BBC was considering whether to break “standard practice” of continuing to pay suspended staff.

“It’s absolutely right to look back and reflect,” he said. “It’s common practice, but maybe we need to challenge that. I welcome the idea that we’re looking at that policy. Could you be more forceful on pay? That’s where we stand.”

In his first appearance before a parliamentary committee, BBC chairman Samir Shah said the scandal had caused serious damage to the BBC’s image.

“What Huw Edwards did damaged the reputation and trust of the BBC and we take that very seriously indeed,” he said. “It was a shock when I found out he had been charged and had been living this double life. Secretly he was this person who did the most horrific things. I want to make it clear that the person who betrayed the trust of the nation, the trust of his colleagues, was Huw Edwards.”

One committee member, Lord Hall, a former BBC director general, asked whether the 11-year Royal Charter review system should be replaced and suggested a model like Channel 4, which is state-owned but not subject to regular government scrutiny.

“We are almost constantly under scrutiny … in this not very pleasant relationship with the government,” said Shah, who would like to abolish the time-based review model. “It undermines and threatens our independence. I would absolutely welcome an inquiry into constitutional innovations when it comes to the BBC and the government.”

He also expressed his displeasure at the government’s power to appoint five of the BBC’s ten non-executive board members, while four others are senior executives of the corporation. He believes the corporation should have the power to appoint its own chairman.

Shah also said the BBC remained too focused on “big cities” and London.

“In my view, the power structures remain concentrated in London,” he said. “The BBC still feels like an organisation whose power base is in London. We need to break that. The key thing is to get the power out of London.”