The Home Office has played down a suggestion that the government could stop a convicted rapist receiving his £7m lottery win.
Blunkett's plans will not stop Iorworth Hoare keeping his win
Iorworth Hoare, nearing the end of a life term for attempted rape, bought his winning ticket on day release.
Culture Secretary Tessa Jowell had seemed to suggest the government might intervene in Hoare's case to make sure his money went to victims.
But the Home Office has now insisted that cannot be done.
"We recognise that we cannot act retrospectively in relation to this individual," a Home Office statement said.
"Tessa Jowell is merely expressing what the home secretary himself has said in relation to this case - it is clearly unpalettable that he should have won the lottery," it said.
Ms Jowell had told BBC Radio Four's World at One programme the government was considering intervening "in a very specific case like this" to ensure the winnings went to the benefit of victims.
Writing in Thursday's Sun newspaper, the Home Secretary David Blunkett said: "We can't stop a prisoner or their family from buying a ticket, but we can look closely at making sure they don't benefit from a single penny while in prison.
"We thought of this in a consultation paper we published in the New Year.
"We announced we would take action so we could recover compensation if an offender won the lottery. I have legislation before Parliament to do just that."
Offenders would also be forced to contribute to a compensation fund for victims of crime, he said.
Home Office minister Hazel Blears denied Mr Blunkett's proposal for a new law was a knee-jerk reaction or that he was trying to be populist.
Ms Blears told BBC Radio 4's Today programme she hoped "somebody somewhere is thinking about the possibility of civil proceedings for damages".
Most people would be "absolutely outraged" by Hoare's win, she added.
Hoare, 52, and originally from Leeds, is serving life after being convicted of attempted rape in 1989. He was also jailed several times for a string of sex attacks, including rape, during the 1970s and 1980s.
He was one of three winners to share Saturday's £21m Lotto Extra jackpot.
Hoare was on release from Leyhill open prison, in Gloucestershire, when he bought his winning ticket.
He was understood to have been staying at a bail hostel in Middlesbrough.
Under Home Office guidelines, prisoners on temporary release from jail are allowed to play the lottery and can claim a winning prize.
But the Home Office said Hoare's access to the money would be restricted while he was in custody.
Legal experts say Hoare could be forced to pay compensation to people he attacked, while support groups say the money should go to rape victims.
The first police officer to arrest Hoare backed those calls.
"I can't think of a less deserving person to win £7 million," said retired detective chief inspector Mick Grubb, who arrested Hoare for sex offences in 1966.
"If he does get the money, I don't think he should get all of it. He should put some towards compensation for his victims."
Hoare's estranged wife Irene told the Sun she would fight for a share of his jackpot and use the money to help his victims.