Arts projects to lose out as Lotto money goes to Games

Arts and heritage projects, which have in recent years benefitted hugely from lottery largesse, are set to lose out on tens of millions of pounds which will be diverted to help fund London's 2012 Olympic dream.

Camelot, the lottery organisation, said ventures such as today's Olympic scratchcard would raise £750m, half of Lotto's £1.5bn contribution to the event. The remainder will come from lottery profits that would otherwise have gone to good causes such as funding museums and exhibitions.

The way the scheme works at present, £340m - about 45 per cent - of that would have been earmarked for sports and the remainder, £410m was to go to the Big Lottery Fund, and major arts and heritage projects.

The arts community is now determined to lobby hard to prevent savage funding cuts in the run up to 2012. Mark Wood, chairman of the Museums, Galleries and Archives Council said the issue would now "dominate the agenda" in his talks with Government departments.

"This is a serious amount of money but I suspect you have not heard the end of the story," he said. "Museums and galleries are among the most popular tourist attractions in the UK and they are a part of the bigger role of the 2012 Games. With that in mind we will want to make sure that we don't lose out on the Olympic dividend."

He said that in exchange for co-operation on Olympic lottery plans, his members would be hoping for direct government funding, especially in the regions.

Sir Nicholas Serota, the director of the Tate, has already warned that it is important that the Games does not "cannibalise" all the money required for culture between now and 2012: "The Olympics has to be additional and a catalyst and not instead of what we are doing at present.".

Holding the Government line on the Games, the Culture Secretary, Tessa Jowell, insisted that diverting lottery funding to fund London 2012 was a fair price to pay, considering the dividend the games would bring to the whole country. Games organisers point to the planned cultural festival in Hyde Park and Victoria Park, which will showcase London's music, theatre and cinema.

"You will always find people who will complain but what I would say is just think of everything you can do to maximise the benefit of the Olympics. It's a once in a lifetime opportunity" Mrs Jowell, the Cabinet minister in charge of the Olympics, said.

Now is not necessarily a good time to launch new gaming schemes: disappointing sale of the Euromillions games has fuelled fears that the Olympic scheme may struggle to hit its targets. But Camelot's chief executive, Diane Thompson, said she was confident of reaching revenue milestones: one-third raised by 2009 and the balance thereafter. If these targets were exceeded, Ms Jowell said, London's taxpayers could expect to pay less towards the Games.

Camelot is expected to introduce other schemes in the run-up to London 2012, including a game tied to the Beijing Olympics in 2008.