The BBC is braced for fresh controversy over its use of the licence fee, with a hard-hitting report from senior MPs set to recommend that its commercial activities be sharply curtailed.

The Commons culture, media and sport committee is expected to recommend that BBC Worldwide, the ­corporation's business arm, should return to its original function of making money out of BBC programmes and spin-off products.

Smaller rivals, particularly in magazine publishing, have accused the BBC of abusing its state-funded position to snap up businesses which have no link to its output – such as the travel guide business Lonely Planet – or launch ventures like the food magazine, Olive, which might squeeze others out of the market.

Sources close to the committee, which is now finalising its report for ­publication this month, said there was a "big question mark" over the sea change that had taken place in the last few years, as the BBC "abandoned the pretence" that Worldwide's activities were directly linked to programmes.

Last night there were signs that the BBC was moving to put its house in order ahead of the report's findings as it emerged that BBC Worldwide had ­quietly ditched a controversial website set up last year to offer advice and information about the environment.

Insiders said BBC Green had been shut down because it was likely to be criticised by the BBC Trust. The ­closure casts doubt on an ambitious plan to launch four similar, advertising-funded "portals" covering subjects including parenting, the countryside and sport this year. It is thought they may now be postponed indefinitely, although a spokeswoman for BBC Worldwide insisted they could still go ahead.

The spokeswoman said BBC Worldwide had shut down BBC Green, which was funded by advertising, for commercial reasons, adding: "We are a commercial business and in difficult times we have to look at our portfolio." Unlike sites such as topgear.com and gardenersworld.com, which use material generated from and linked to its programmes, BBC Green covered environmental issues rather than being linked to a ­specific show.

The select committee report is expected to argue that it is right for BBC Worldwide, which made £112m last year, to maximise profits for the benefit of licence-fee payers through activities such as selling the rights to programmes overseas or developing magazines and merchandise, but that it should not be allowed to distort the market.

MPs have also been concerned by complaints from local newspapers that the BBC's decision to set up news websites linked to its local news bulletins were driving them out of business. Criticism of BBC Worldwide has intensified as the recession reduces the pool of advertising from which rival publishers are now drawing revenue.

The BBC Trust chairman Sir Michael Lyons hinted last year that Worldwide had gone too far, saying trustees were "of the view that [it] needs to be modestly contained".