The initiative, which will be announced just days after the latest lottery rollover, could put tens of millions of pounds into the hands of small voluntary organisations.
The Prime Minister will announce the plans in his speech to the Labour Party conference on Tuesday, and promise a pilot project in Scotland beginning next year.
Under the proposals, which will require legislation, the money will come from four existing distributors which channel money into the arts, sport, heritage and millennium projects.
A new board will administer the cash with the aim of allowing small groups to apply for money without going through the level of bureaucracy required at present. One of the main complaints of small organisations is that, although small sums are at stake, they are required to go through the same procedures as applicants for multi-million-pound grants.Reuse content