Freeserve joins lottery bid

Camelot's terminals are already in place

Camelot has brought internet firm Freeserve into its bid to win the licence to run the UK's National Lottery for the next seven years.

Camelot, the current operator, has already agreed to link up with the Post Office to bid for the licence, and has pledged to raise more than £10bn for good causes.

It also promised to invest £1bn in new technology, allowing people to play via the internet, mobile phones and interactive television by 2002.

Internet service provider Freeserve is to develop and run the system for buying lottery tickets online.

Camelot is fighting off a rival bid from Virgin tycoon Sir Richard Branson, who has pledged to run a non-profit "People's Lottery".

Both bids, thought to be the only serious contenders for the new licence, will be handed in on Tuesday to the National Lottery Commission.

The winner, to be announced in June, will secure the new licence from October next year until 2008.

Millions of punters hope their numbers will come up

Camelot chief executive designate Dianne Thompson said: "Our approach is based on continuation and innovation to deliver the best deal for the good causes and the best opportunities and most fun for players."

The move is seen as an attempt to head off accusations of greed which have dogged the operator from the beginning.

Camelot members - Cadbury Schweppes, De La Rue, ICL and Racal - have shared £231.6m of profits since the lottery first started.

However, the consortium is also expected to have exceeded its target of £10bn raised for good causes by the time its licence expires.

'Why now?'

Earlier, Camelot had suggested it might cut its profits by 50%.

The move would mean a fall of £24m in overall profits.

Simon Burridge, who would be appointed chief executive of The People's Lottery if the bid were successful, was critical of the move.

Mr Burridge said: "Why, after filling their pockets for seven years, are they responding to public opinion now in the face of our extremely strong and technically reliable bid?"

The costs of putting in place the National Lottery infrastructure, at its 1995 launch, have been repaid, and it is believed that operating costs have fallen.

Previous attempts by Camelot to shake off its "fat-cat" image included announcing that its new chief executive would be on a lower salary than her predecessor.

Camelot revealed its plans on Monday, also announcing a joint project with Nokia and Vodafone to allow mobile phone users to play lottery games.