Camelot has responded with alarm to new plans to deregulate gambling believing the new approach could cut the sale of lottery tickets by 20 per cent.

It has expressed anger at the recommendation to allow bookmakers to take bets on the result of the lottery.

The recommendations come amid a raft of new proposals to deregulate gambling, put forward by Sir Alan Budd in a government-sponsored report yesterday.

His report paves the way for "Vegas-style" resort casinos in towns such as Blackpool.