Prime Minister Tony Blair is thought to support an Olympic bid

Sports Minister Richard Caborn has denied reports that the government will approve a London bid for the Olympics within a month.

The Sunday Telegraph says that Prime Minister Tony Blair has decided to back the bid, which must be submitted to the International Olympic Committee by 15 July.

But Caborn, speaking on the BBC Radio Five Live's Sportsweek programme, insisted no decision has been made.

"Obviously, it's speculation," he said. "It's not true in the sense that I don't quite know when it's going to Cabinet.

"Everybody knows that the decision on the Olympics was put on hold because of the hostilities in the Middle East, and now that's over people are turning their minds to post-war issues, and obviously one of those is the bid for the Olympics."

I can confirm that we have not had any definitive answer from the government British Olympic boss Simon Clegg

British Olympic Association boss Simon Clegg told Sportsweek that the government had not told him whether or not they were prepared to back an Olympic bid.

"I can confirm that we have not had any definitive answer from the government, or any indication regarding the time frame that they intend to work to," he said.

"But now that the war is over I hope that we can expect a decision in the coming weeks and months, as opposed to leaving it much longer than that."

In order to pay for the Games, the Sunday Telegraph claims the government will give its backing to a new lottery game - something Caborn refused to rule out.

There has been the general discussion of how you get revenue streams coming in to fund the Olympics Sports Minister Richard Caborn

"There's no specific decision been made," he said.

"There's been the general discussion of how you get revenue streams coming in to fund the Olympics and the lottery was one of those."

Over the nine-year period it would be in operation it would raise an estimated �750m towards an overall cost of �2.6bn.

In addition to the cash raised by the Olympic lottery, the government also intends to take a further �300m from lottery money currently given to sport and use it for the Olympics.

A spokeswoman for lottery operator Camelot said: "We have had discussions with the Government regarding a positive bid for the 2012 Olympics.

"We have come up with a number of new and exciting games that could be created."

The Prime Minister, Tony Blair, reportedly took a lot of persuading to back the Games bid.

"His instincts were to say 'Yes', but he was worried about it being another fiasco like the Dome," an unnamed minister told the Sunday Telegraph.

Chancellor Gordon Brown was said to be won round when Culture Secretary Tessa Jowell suggested the Olympic Lottery.

"He wasn't in favour of giving an open-ended commitment, but we will be able to avoid that," a friend said.