The idea was included within a "National Plan for Elite Sport and Participation" unveiled by Sports Minister Greg Hunt in Canberra  today.

"A National Lottery, to be developed with the States, and activity to boost participation are among options being considered," a statement confirmed.

This would mark a shift towards a funding system already in operation in other countries, including in Great Britain.

Hunt revealed afterwards that it is hoped such a system could be in operation by July 1 next year

He hopes it could generate around AUD$50 million (£28.7 million/$37.2 million/€33.3 million) each year for elite sports programmes.

"It's something that in my time and on my watch I would like to see us achieve," he said.

"It's something which I strongly support, I know in my discussions with [Australian Olympic Committee (AOC) President] John Coates and [Australian Sports Commission (ASC) chairman) John Wylie they've long been advocates of this, and this is a way of finding funds, working with the States.

"If it is legislated and highly regulated, and it's a public good lottery then that's sensible.

"It is a sensible way to provide additional permanent sports funding which I think is fair, reasonable and appropriate. 

"In 30, 50 and 100 years it will still be here and providing a way to support participation and support performance for elite Australian sport."

The idea forms part of a plan considered a "long-term strategy for the whole of sport".

It will "examine four key pillars of participation, performance, prevention through physical activity and integrity".

"Consultation" will also engage on major sporting events, sports infrastructure, sport governance and funding.

Sporting bodies in Australia are seeking to repair their relations following a fractious AOC election earlier this month in which Coates defeated ASC-backed opponent Danielle Roche to retain his position as President, a post he has held since 1990. 

"The AOC welcomes the Minister's initiative," said AOC chief executive Matt Carroll.

"Every athlete, every team, every sport needs a plan to succeed so this initiative is critical for Australia's sporting future.

"The National Plan will bring clarity on the roles and responsibilities of all the parties involved and establish the support, infrastructure and funding required to achieve the collective sporting outcomes for the country.

"The AOC accepts that Australians set high expectations of sport administrators, not just in providing opportunities for athletes to achieve medal success, but in growing participation, ensuring community outcomes in health and education are achieved and importantly setting standards that meet our cultural values. 

"We welcome that the Ministers National Plan will be addressing all of these aspects."

Britain's National Lottery system was first implemented in 1994 and has led to vast improvement at Olympic level.

They finished second on the medals table at Rio 2016 behind the United States after finishing 36th with just one gold medal 20 years earlier in Atlanta.

In contrast, Australia fell from fourth place finishes on the Olympic medals tables at Sydney 2000 and Athens 2004 to 10th at Rio 2016.

A total of 29 medals at Rio 2016 marked Australia's worst Olympic tally in 24 years and included just eight golds - less than half the amount the country won at Athens 2004 where it won 17 titles.

The ASC is the main provider of funding for most Olympic sports but its Government grant has declined over the last five years.