The National Lottery Commission had been expected to announce the winning bid next week, but has now said it will make the announcement in August.

Both bids have the potential for improvement

Dame Helena Shovelton

There are two bidders for the new seven-year licence: the existing operator, Camelot, and Sir Richard Branson's People's Lottery.

The commission's chair, Dame Helena Shovelton, said: "It is the commission's overriding responsibility to achieve the best result on behalf of players and the good causes.

"It has become apparent during the evaluation that both bids have the potential for improvement. The extension is intended to achieve this."

But the commission, which has tried to ensure complete confidentiality since the bids were submitted in February, will not say how it believes the bids could be improved.

BBC Media Correspondent Nick Higham said the commission may want changes to ensure greater protection for players or more money for good causes.

25 billion tickets

Camelot has held the licence, issued by the government, since the lottery was launched in 1994.

But the company's seven-year contract runs out next year and last September bidding was opened for the next term.

Since it took the licence, Camelot has come under fire for its large profits.

Sir Richard, whose company Virgin failed in its bid to run the lottery in 1994, has been a vociferous opponent of Camelot's handling of the game.

In the five years the lottery has been running, there have been more than �25bn of tickets sold.

A spokesman for the People's Lottery said: "The People's Lottery has asked the National Lottery Commission for a shorter timetable and are awaiting their response.

"In the meantime, we are looking at the feasibility of implementation on the longer timetable and will be reviewing that over the weekend. We will make a further statement on Monday."