A report in the Daily Telegraph newspaper claimed that, in return for half of the lottery money, the Government would fund a new athletics stadium to stage the 2005 World Athletics Championships.

We are working with UK Athletics with a view to bringing the 2005 World Athletics Championships to Wembley.

WNSL's Chris Palmer

Culture Secretary Chris Smith is reported to be set to announce the compromise next week in the House of Commons, in effect making the new Wembley solely a football stadium.

But Chris Palmer, communications director for Wembley National Stadium Limited, insisted athletics was still part of the plans for the new £475m Wembley stadium.

Palmer said: "The report is not accurate. We are working with UK Athletics with a view to bringing the 2005 World Athletics Championships to Wembley.

Athletics officials claim Wembley will be unfit to host the 2005 World Athletics Championship

"That is, and always has been, our position. If the world athletics championships are coming here, they are coming to Wembley."

A spokesman for the Department of Culture, Media and Sport (DCMS) said: "We don't know what the basis of the article is and until the process is complete we will not be making any announcements."

Wembley's redevelopment has been dogged by controversy, since the designs revealed by Lord Foster were deemed unsuitable to stage a major athletics event.

Various other options have been put forward, including the use of a temporary platform for the 2005 championships coupled with the building of a separate athletics stadium elsewhere, possibly to be shared with a football team, with a capacity of 20-25,000.

But it is understood that the option favoured by Wembley National Stadium Ltd involves Wembley re-opening with a major athletics event and the track remaining in place for the 2005 championships, after which it can be removed.

A spokesperson for UK Athletics added that the report was "jumping the gun a bit" but it is understood that the DCMS has met with the British Olympic Association to discuss athletics venues away from Wembley.