Fifa has said that Great Britain must enter a team at the 2012 Olympics but that each home nation's individual status will not be affected.
Fifa's Sepp Blatter has tried to reassure the home nations
The idea has been mooted before but has never been adpoted because of fears that Fifa would insist on a Great Britain team at the World Cup as well.
But Fifa president Sepp Blatter said there was no danger of this happening.
"The four British associations will not lose the rights and privileges acquired back in 1947," Blatter insisted.
"They will play with one team but it is up to them how they do it.
"It can be a mixed team, it can be from just one of the home nations, whatever they want to do."
The idea of a Great Britain team has met with some opposition from the Scottish Football Association and they gave a lukewarm response to Blatter's latest move.
An SFA spokesman said: "Fifa have said before that this is a matter for the British associations to decide.
"We are not currently party to any discussions on this and we have made our views entirely clear about an Olympic team.
"So the position has not changed as far as we are concerned."
But FA executive director David Davies was more positive about Blatter's remarks.
"What Mr Blatter has said is clearly welcomed by those of us who believe we have a positive contribution to make to football and the Olympics."
The Great Britain team would be limited to players aged under 23 but three overage players would be allowed.