Casinos will have stricter controls

The proposals, which could become law by 2006, include banning fruit machines from unlicensed premises, such as take-away outlets.

Unlimited money slot machines would be restricted and councils would be given powers to prevent new casinos.

The bill received a mixed response from gambling addiction groups, but councils which want resort casinos welcomed it.

Culture, Media and Sport Secretary Tessa Jowell said she hoped to bring the Gambling Bill before parliament later this year.

The new gambling laws have been drawn up in response to a report from the parliamentary joint scrutiny committee, which said the draft bill would lead to an increase in problem gambling.

Modernisation is essential if we are to keep gambling fair, crime free and protect children and vulnerable people Culture secretary Tessa Jowell

Ms Jowell said the government would "always put the interests of children and vulnerable players first, second and third."

Las Vegas-style slot machines which offer unlimited prize money will only be allowed in the biggest resort casinos, with a limit of 1,250 machines permitted in each.

The culture secretary said casinos would be required to have non-gambling "chill-out" rooms, and small casinos would not be allowed to run bingo games.

Local councils would be given powers to prevent new casinos opening up in their area, she said.

At risk

Studies would be carried out every three years to examine how prevalent gambling had become as a result of the reforms, she added.

Ms Jowell said Britain's low rates of problem gambling was at risk unless the laws were updated.

Vegas plans for Blackpool

The Methodist Church, which has campaigned for tougher gambling controls to protect vulnerable people, said it feared that problem gambling would rise as a result of some of the measures included in the bill.

"We are disappointed, therefore, that the government still sees the problem of gambling as an acceptable price to pay for more gambling opportunities", said Rachel Lampard, the Methodist Church's secretary for parliamentary and political affairs.

Jonathan Lomax, public affairs officer for the Salvation Army, welcomed the proposals to remove fruit machines from unlicensed premises but said they should also be taken from arcades.

Regeneration hopes

Meanwhile Blackpool Borough Council welcomed Mrs Jowell's announcement.

Borough council leader Roy Fisher said resort casinos "represent an opportunity to provide a unique tool for regeneration".

The council's plan to regenerate Blackpool, which was published last year, envisages five new-style resort casinos, to help create 30,000 jobs and �437m of new income a year.

The government's announcement affected shares in gaming groups such as Stanley Leisure and Rank, which registered initial losses of about five per cent of their market value.