Under the council's plans,grants would be awarded to such artists for the creation of "new work".
This definition should be exploited by the literary world, according to Professor Andrew Motion, the poet and biographer who chairs the Arts Council's literature advisory panel.
He is appealing for writers and publishers to come up with suggestions on how such money could be spent following the publication of an Arts Council consultative document, New Lottery Programmes.
The document, published last month, offered a mould-breaking interpretation of the areas which could benefit from lottery arts money - in keeping with the council's private determination to extend funding beyond the capital projects it is supposed to support.
Using a surprising loophole, it argued that "in lottery terms, 'new work' is considered to be 'capital' - comparable to a building or a truck".
Prof Motion believes the new thinking offers literature, the most neglected area in terms of arts lottery funding, the chance to get in on the act. Only 11 of the 704 arts grants so far have gone to literary interests, totalling pounds 711,000 out of pounds 425m.
"It does not require a mathematical genius to work out that writers and readers are receiving a miniscule proportion of the funds, or that the status of literature in this country is . . . not reflected in the number of grants so far provided," he said.
Under the new guidelines - expected to be implemented next April - Prof Motion believes it could be possible for money to go to publishers who feel "left out in the cold by the Establishment", to magazines which promote experimental writing, and to poets.
He also favours funding the creation of writers' houses in which professional writers could go for a week or two to work away from "yowling families".
"This is the Golden Age. If writers don't take the chance to get proper funding for literature now then they probably never will," he told the Independent.
The consultative document said that any scheme involving practising artists - amateur or professional - should be eligible for funds if it could be demonstrated that the work was additional to their regular programme. "Just as capital building projects often start with a feasibility study . . . so could artistic initiatives," it said.
"It may be possible to apply lottery funds to an 'R&D' [research and development] process through which creative artists (writers, choreographers, musicians, etc) try out an idea before committing large amounts of time and money on it."
However, the more flexible approach seems unlikely to benefit libraries, which are effectively barred from claiming lottery funds. Prof Motion said he "had spent a lot of our meetings banging on about libraries" - but could not suggest a concrete way by which they might be helped.Reuse content