Unlike rival consortia, the lottery company being formed by Mr Branson will covenant all its profits to a charitable foundation.
Lord Young of Graffham, chairman of Cable and Wireless, will be chairman of the operating company and, along with Mr Branson, a founder trustee of the UK Lottery Foundation.
Other trustees of the consortium will be Lord Callaghan of Cardiff, Viscount Whitelaw, Viscount Tonypandy, the former Speaker of the House of Commons, and Sir Angus Ogilvy.
In addition to the five beneficiaries which have already been identified by the Government - the arts, sport, charities, national heritage and the millennium fund - the foundation would channel money into other areas such as health promotion, children's projects, community care and emergency and disaster relief.
Estimates of total revenue from the lottery, which will be launched next year, range from about pounds 2bn to pounds 6bn.
Of every pound raised, 12p will go in tax, 50p in prize money and 23p to good causes, leaving 15p for the operator.
Mr Branson, who first raised the idea of a national UK lottery run especially for charitable purposes with Margaret Thatcher in 1988, said of his lottery plans yesterday: 'The public will give more support to a lottery if they know that the profits are going to a good cause. Greater popular support means a higher turnover and therefore a more successful lottery.'
The Branson lottery would have about 20,000 outlets in stores and post offices equipped with IBM computer technology.
Mr Branson rejected suggestions that part of his motivation was self- publicity, saying: 'Any time you do something for a good cause, you know you are going to get knocked.'
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