A single community distributor
The New Opportunities Fund and the Community Fund will merge, creating a "single community distributor" which will handle half of all lottery money.
It will fund charities, the voluntary sector and health, education and the environment. It will also handle non-lottery funds.
The new distributor will also work with community interest companies (CICs), the new legal form being created for social enterprises.
The new community distributor will be a single point of entry for applicants unsure of which lottery board to apply to.
Seven new types of lottery funding
The voluntary sector, arts and heritage are promised their existing share of lottery funding until 2009 through seven kinds of grant programme, including open grants, which will be similar to current Community Fund grants. This stream of grant funding will not be subject to any higher control from the Government.
National programme funding will be similar to current New Opportunities Fund grants in health, education and environment.
A Young People's Fund of £200 million will initially be funded from NoF's share of lottery money, but the Government wants it to grow into a "genuine joint scheme" under the new distributor (see Key Points, left).
All distributors will involve the public more in decisions about lottery funding, using opinion polling and customer consultation techniques, including "citizen's juries".
The new single community distributor will be structured to allow different levels of decision-making, but it is not clear whether the Community Fund's regionalised structure will survive.
The UK-wide structure will be preserved (there will be no Scottish lottery distributor) but there is a promise of more involvement for devolved administrations in setting priorities.
All lottery distributors will be issued with guidance to speed up the funding of projects, and legislation will be introduced to reduce excessive balances.
This is tackled in the second White Paper on licencing which says that different companies will be able to run lottery games under a change to the licensing system after 2009.
MINISTER'S BALANCING ACT
Culture secretary Tessa Jowell unveiled what she called "the biggest overhaul of the Lottery since its inception" last week. But she was also performing a balancing act, promising a people's lottery than would still back unpopular causes.
"I passionately believe that permanent revolution is essential to the lottery's survival, its continued health and vitality," she told representatives from the voluntary sector and the lottery distribution bodies at the seventh annual lottery monitor conference in west London.
She promised to "give the lottery back to the people" through citizens' panels and juries. Grants to charities especially were earmarked for democratic scrutiny.
"Who better to decide on how money should be spent in a community than the very people who live there?" she asked. But she added: "I promise you it will retain its capacity to work independently of Government. Its capacity to champion the vulnerable and unpopular will no doubt at times infuriate government ministers. But we must live with that."