Peers to block £1bn Olympics raid on lottery cash

Ministers fear they could lose a crunch vote on Olympic funding, the Evening Standard can reveal.

They admit they face a struggle to get Parliament to approve the transfer of £1billion from the National Lottery Distribution Fund into the coffers for the 2012 Olympics.

With its majority in the Commons, the Government can get MPs to back the cash transaction. But in the Lords, where Labour does not have a majority, Tories and Liberal Democrats have vowed to block a parliamentary order for the £1,085 million transfer.

Many peers are keen supporters of heritage, arts and sporting groups which they fear will lose out as Lottery money is diverted to pay for the 2012 Games which currently have a budget of £9.3billion.

But Culture Secretary James Purnell has warned there is no alternative source of funding. "There is no prospect of further funding from either the Government ... or from the Mayor of London ... nor is there any prospect of raising private funding in lieu of the Lottery funding," the Department for Culture, Media and Sport told peers investigating the transfer order.

"Without this funding there will be no Games and the benefits of this huge regeneration programme will be lost." Opposition peers, though, are refusing to back down in the dispute.

They have accused the Government of failing to provide details on other funding options and branded the impact assessment - on how the £1 billion loss to the Lottery would affect heritage, art and sport projects - as "inadequate".

The Conservatives and Lib-Dems say they will vote against the order unless the Government amends it.

Shadow Olympics minister Hugh Robertson said: "The Conservative Party could not support a further raid on the Lottery at a time when the Governmentis refusing to divulge any details about the Olympic budget."

Lib-Dem peers will table an amendment to the order to trigger a vote which could be taken before Christmas.

Peers can table fatal amendments, to kill off orders, though historically they have avoided doing so, opting instead for non-fatal amendments which puts pressure on the Government to change its plans without blocking them.

But given the anger over the "raid" on Lottery funds, both the Tories and Lib-Dems signalled they are prepared to go for a fatal amendment.

Lib-Dem culture spokesman Don Foster said: "We will vote against this order going through the Lords and the Commons unless we can get agreement from the Government to adopt measures that would provide significant additional sums into the Lottery good causes."

The Culture Department played down the committee's criticisms and said they were not severe.

A spokesman added: "We provided all the material in the impact assessment we were able to. What we could not do was predict the future and say how many grant applications would be made for Lottery funding or what decisions arm's-length distributors would make."