Labour would also impose much tighter limits on the profits which can be pocketed by Camelot if the lottery company wins a second licence. This year its profit was pounds 51.1m after tax, a sum which provoked bitter criticism.
However, the party has accepted that the lottery could be run by a profit- making body, which increases Camelot's chance of renewing its seven-year contract. Chris Smith, formerly Labour's spokesman for Heritage, had insisted the next lottery operator would be non-profit-making.
The proposals have been drawn up by Labour's lottery review committee. Chaired by Jack Cunningham, the spokesman for Heritage, its members include film-maker David Puttnam and Helena Kennedy QC.
Mark Fisher, Labour's spokesman for the arts, told The Independent: "We will be requiring much tighter contracts to operate the lottery than the present Government's, which we think were ludicrously lax, with profit margins which were far too big. The existing contract is incompetent and naive." The committee's report on the lottery, to be published next month, appears certain to give public libraries the power to apply for capital funding. At present they are largely forbidden from lottery largesse.
They will also be able to apply for revenue funding for information- technology systems, although not for core services such as book buying."We recognise it is wrong to exclude libraries," Mr Fisher said.
The move will be welcomed by campaigners, who have long attacked the widespread closure of branch libraries and cuts in opening hours.
The Labour report is also expected to advocate redirecting the lottery money which goes to the Millennium Commission to children's play areas, multi-media education, arts education, and home insulation.
The new streams may be eligible for lottery funding for a fixed five- year term, after which new areas will be chosen.
But if they win popular support the party would also consider "slicing off" the top from other lottery streams which, under present legislation, go equally to arts, sport, charities and heritage.
In an amplification of proposals floated by the Labour leader Tony Blair at Blackpool, Mr Fisher added that giving lottery funds to arts education was part of a policy drive to raise quality. Primary and secondary schools will be required to publish a statement on their arts and music provision at the start of each educational year so that parents can compare the differing amounts offered at various schools.
In conjunction, the lottery money will be offered to schools, which must apply in jointly with each other for arts projects. These could involve employing an artist in residence, a jeweller or designer to teach classes, or even inviting a rock band to make regular visits.
Another strong candidate for the cash is the insulation of homes. Here it is likely that funds would initially go to people on benefit. The lottery money would come from the Millennium Commission, which receives one-fifth of the total proceeds available. Its income had totalled pounds 441m by this May. It is due to be wound up in 2000, and will make its last capital project awards next summer.
The Government is thought to be considering its own plans for the Millennium money, possibly including funding national digital libraries accessible from home, and equipping schools with new technology.
Mr Fisher said Labour did not intend to create new distributing bodies to allocate the new funding streams. Instead the remaining four bodies would have new duties added.Reuse content