Classical music and hymns are replacing rock and pop on BBC Radio Cymru as the deadline for a rights deal with leading Welsh-language musicians passes.

The right to broadcast the songs of 331 Welsh-language musicians and music publishers rests with Eos - the Welsh word for nightingale - from today.

The BBC said Eos had rejected a substantial offer to settle the dispute shortly before Christmas. As no agreement was reached, Radio Cymru has implemented changes to its broadcasting hours and programme content.

BBC Cymru Wales said in a statement on Monday it was "very disappointed" an agreement had not been reached and confirmed Radio Cymru programmes would be affected.

"Radio Cymru's commitment to support and develop Welsh music is a longstanding one - and we have listened carefully to the concerns of Welsh-language composers and artists during this dispute," the statement said.

The musicians broke away from the Performing Rights Society (PRS) to join a new agency, claiming they were being short-changed for their work. The dispute arose from a change by the PRS in 2007 which many Welsh language artists claim cut their royalty payments by as much as 85%.

The report says artists who broadcast on BBC Radio Cymru receive 49p for every minute of airtime, collected by PRS. However, it says Radio Cymru is treated like an English local radio station, rather than a national broadcaster

The report argues that if the station was available on the UK DAB network of digital stations, artists would earn £4.71 per minute, nearly ten times as much. It said a Welsh-based royalties agency would be aiming to bring back in something more like the larger DAB royalties fees.

"Welsh language repertoire - Radio Cymru relies on that for its broadcasting," pointed out the report's joint author, Deian ap Rhisiart. "If the whole composers and publishers en block declare they are terminating their membership with the PRS, then the BBC haven't got any choice but to deal with them - that's the scenario."

But while overall revenues are being hit by falling CD sales and lower income from music in advertising, Porter said 80% of the decline can be blamed on interest rate cuts.

Robson, 75, who was targeted last year, said: "There is usually only me here and I like to have nice relaxing music. The woman said she could hear music in the background. I thought, 'My God, you’ve got good ears.' She asked how many of us were here listening. I said me and sometimes the dog. Eventually, after I made a fuss, they apologised and said I would not be bothered again."

John Collins, 57, who runs a software company from a room at his home in Welwyn Garden City, Hertfordshire, received letters saying he needed a licence for the classical CDs he played while working. "If my wife Susan brings me a cup of tea and hears the music then I might be liable," he said.

Even dogs and cats do not always escape targeting. Follybridge cattery near Peterborough and Stokenchurch dog rescue centre in Buckinghamshire, which play Terry Wogan’s Radio 2 show to their "guests", were both told they would need a licence in case any workers heard the music.