Up to 3.75 million pensioners will be stripped of the right to a free television licence next year after the BBC made a decision to means-test the benefit.
Over 1.5 million households with residents aged over 75 could receive free TV Licences funded by the BBC if they receive Pension Credit.
From June 2020 around 3.7 million households which previously received a free licence will now have to pay for one.
By 2020 thousands of people across the United Kingdom will be affected by changes being made to the TV licence fee.
Mr Watson said: "It is an outrage that this Government is overseeing the scrapping of free TV licences for three million older people, leaving a Tory manifesto promise in tatters".More news: Kevin Durant boards plane to travel with Warriors to Toronto
He added: "It would not be right simply to abolish all free licences".
Explainer: What do the TV licence fee changes mean for over-75s? Under the agreement, the BBC would receive some funding boosts in return for taking the potentially financially ruinous responsibility for providing services to the over-75s.
Tony Hall, BBC Director-General, said: "I believe we have reached the fairest judgement after weighing up all the different arguments".
DUP MP Ian Paisley has said the BBC is "burdening" a huge number of pensioners after taking the decision to scrap the universal provision of free TV licences for over-75s. This time it was Hall - who back in 2015 had warned there would "be hard choices" as a result of the deal he helped to strike - who made the announcement that most over-75s would have to start paying for BBC services unless they claim pension credit.
But many people have called this "unfair" for pensioners who may struggle to afford this new charge.More news: Sabres re-sign Jeff Skinner to eight-year, $72 million contract
The broadcaster said this afternoon it will now restrict the free licences to pensioners who meet strict criteria. It protects those most in need.
A Downing Street spokesperson said May was "very disappointed" with the BBC's decision and urged the broadcaster to reconsider, with government sources highlighting the high pay of many BBC executives as a potential alternative saving. And importantly, it is not the BBC making that judgment about poverty.
"Viewers and listeners will still receive the best programmes and services that the BBC can provide".
However, it will allow the BBC to avoid £500 million in cuts that would have led to the closure of channels.
Age UK has hit out at the move, with its charity director Caroline Abrahams saying: "Make no mistake, if this scheme goes ahead we are going to see sick and disabled people in their eighties and nineties who are completely dependent on their cherished TV for companionship and news, forced to give it up".More news: E3 2019: Division 2 DLC Roadmap Goes Back To New York
"We also need to look at how the level of the licence fee is set in the future".