The government has promised the Department of Culture, Media and Sport a pay boost, although exact details will not be announced until next week.

But a department spokesman confirmed that sport and the arts were likely to be the main beneficiaries.

Spending by the department will increase by an average of 4.3% in real terms over the next three years with emphasis placed on improving access for children to participate.

Culture Secretary Chris Smith said: "Today's settlement is very good news indeed for everyone who cares about sport, arts and culture."

Before the announcement, the chairman of Sport England, Trevor Brooking said: "We'll have to wait and see exactly how much more money we're awarded.

"The two most important things are people and facilities. But schools are the key," he said.

"Any sport in this country will tell you they're hanging on at the top level, but they're all fighting over a reducing number of talented youngsters."

Brooking said the extra funding would do much to raise the profile of British sport, and could also help to alleviate a number of the country's growing social problems.

"What we hope is that we get one pot of money to spend, so we can get everyone to work together to achieve the best possible result," he said.

"I genuinely believe if we do get the money, we will make such an impact."