Camelot have had a difficult time over the last year or so and not helped by the National Lottery Commission

Peter Ainsworth Shadow culture secretary

As Camelot was handed the licence, the National Lottery Commission insisted both bids had been far too optimistic over ticket sales.

Last month, it was announced that annual sales from the lottery had fallen below �5bn for the first time in four years.

But Camelot was bullish, insisting it could combat the malaise with aggressive marketing and bigger prize money.

On Wednesday, commission chairman Lord Burns outlined the prognosis for good causes.

He said that instead of the �15bn hoped for, Camelot would face a challenge to maintain contributions at the current level - �10bn plus accumulated interest - by the time the first licence expires in January.

'Worldwide phenomenon'

Lord Burns told BBC Radio 4's Today programme the anticipated shortfall was not unexpected, saying bids by Camelot and the People's Lottery had been "too optimistic".

But he said good causes would get about the "same amount of money as over the last licence period".

Officially announcing the new licence, he said: "Good causes can expect in total at least 28% of sales, which is similar to the amount committed in 1994."

He suggested several reasons why the lottery would struggle to reach its �15bn target.

Sir Richard Branson: fears for good causes

"This is partly because there has been a progressive development of competition to the national lottery in other gaming markets and partly because of the worldwide phenomenon of slowly declining games that need reinvigorating," he said.

Shadow culture secretary Peter Ainsworth said Camelot had run an extremely "efficient" lottery, but called for changes.

"Camelot have had a difficult time over the last year or so and not helped by the National Lottery Commission, who made a complete Horlicks on awarding the contract," he said.

Lord Burns said Camelot would try to revive flagging sales by offering players greater prize money.

Sir Richard Branson who headed the People's Lottery bid said he hoped Camelot could increase sales, for the sake of the good causes.

He said: "The figures sadly speak for themselves.

Marketing plans

"The Commission had the chance for a fresh and, we believe, more imaginative approach but chose not to take it.

"For the sake of good causes we very much hope that Camelot turn it around."

Camelot is understood to be re-evaluating its predictions.

It fears government plans to deregulate other forms of gambling might hit its revenue.

The company is believed to feel it needs more public support for the lottery from the bodies which distribute the cash to good causes.

It is also dependent on how far the commission allows its marketing plans and proposals for new games.

New ways to play, such as via the internet, could be introduced as marketing spend increases.