PROFITS before tax of £77.5 million sterling made by British lottery operator Camelot sparked fresh indignation yesterday over the terms of its seven year government granted licence.

Labour MP Mr Gerald Kaufman, chairman of the National Heritage Committee, said Camelot should give millions of pounds to charity after its first full year figures showed the business to be much more profitable than the regulator anticipated.

Mr Kaufman repeated his committee's recommendation that Camelot increase its charitable donations in order to reflect the £1.5 million profit the company makes each week.

In an effort to deflect wide spread criticism Camelot executives stressed the company had given 13 times more to the Treasury through lottery duty, tax and VAT than it had made as post-tax profit and had given nearly 30 times its post tax profits to good causes.

"We didn't set the licence structure, we're operating under that structure," said the finance director, Mr Peter Murphy.

Sales for the year totalled £5.21 billion, £3.69 billion coming from the weekly game and £1.52 billion from the instant scratch cards introduced in March, 1995. Just over 50 per cent of revenue from sales £2.64 billion was allocated as prize money. Mr Murphy said the company would not introduce a mid week online lottery until the rate of sales growth began to slow.

Camelot's results also confirmed a controversial package of six figure bonuses for the company's top directors.

The chief executive, Mr Tim Holley, received over £385,000 comprising a basic salary of £245,000, a £123,000 bonus and benefits of £17,253 excluding pension contributions.

Camelot said sales could fall by up to £1 billion annually some 20 per cent were the government to allow bookmakers to take bets on the lottery.

Camelot's strong performance will mean large dividends for the five share holding companies, with Cadbury Schweppes, De La Rue, GTech UK and Racal Electronics each receiving £4.14 million and ICL £1.8 million.