The move, expected to be made public in a White Paper, follows pressure from Downing Street on the Department of National Heritage to modify Labour's pre-election plans to divert cash from the midweek lottery to health and education.
But the Government is likely to face criticism for reducing the amount of money going to charities and using lottery proceeds to fund activities now funded out of taxation.
Last night Conservatives accused the Government of raiding lottery cash to fill the "black hole" in its finances.
Before the election Labour said proceeds from the midweek draw would be used for education and health, specifying a number of projects, including the establishment of homework clubs.
Since the election Tony Blair's office has been pressing for changes. The proposal now being discussed would put the cash into an "opportunity" fund, for which a variety of projects could bid for cash.
Richard Branson and Sir David Puttnam will tomorrow be named as the Government's new style supremos in a big shake-up of the Department of National Heritage. Both men will be appointed to a creative industries task-force to boost skills and marketing in design, the music industry, software, multimedia and advertising.Reuse content