Nearly 4,000 pages of documentation flooded into Sport England on Friday evening as the starting-gun sounded on the dash for £500 million of public funding for grassroots sport over the next four years.

The government agency’s e-mail system heaved under the “weight of evidence” from 46 national governing bodies seeking to prove that they can deliver the magic formula of increased and sustained participation in the run-up to London 2012 in exchange for taxpayers’ precious money.

With the Olympics in mind, the grant allocation process is directly linked to the Government’s target to increase the number of people active in sport by one million by 2012. Organised sport is supposed to deliver half; local councils and schools the rest. Given the drop-off in participation among school-leavers, and the political importance of creating a sportier nation by hosting the Olympics, the pressure is on.

So there will be no free hand-outs; no “works of fiction”, as David Sparkes, the chief executive of British Swimming, describes some of the development plans of the past. Sports funding is more exact these days and every pound must deliver. This could not be more pertinent as Britain heads for recession.

The message to sport is clear: attract new participants — particularly in the elusive 16 to 18-year-old demographic — and reap the reward; keep them interested and the number on the cheque will contain more noughts.

“It is more scientific this time round, using evidence of who does what sport now and will in future,” Phil Smith, Sport England’s director of sport, said. “It’s not about salami slicing the amount of money, but about what the sport can deliver.” But, behind the scenes, there are fears that the newfound obsession with participation in the context of London 2012 will mean funding cuts for non-Olympic sports.

What beckons is a fundamental power shift from the establishment sports to the Olympic disciplines. According to data, the “big four” are no longer football, rugby union, cricket and tennis but football, swimming, cycling and athletics.

Measuring frequency of participation, as Sport England does, as 30 minutes of moderate activity three times a week discriminates against organised team sports, which play a match only once a week but whose affiliated members will train in a gym, on a bike or in a pool at other times. That extra activity will not be counted under rugby union, cricket or tennis but running, cycling and swimming.

The comparisons are difficult but crucial. “How can you compare a half-hour jog with a seven-hour cricket match?” a source said. “Sport England has to be careful not to be anti the traditional competitive sports because they don’t fit the criteria.” When James Purnell, then culture secretary, announced Sport England’s new funding priority in November, the aim was a “world-class community sports structure”. The task of encouraging a more active lifestyle shifted to the Department of Health.

The fear in rugby, cricket and tennis is — with the one million participation target quite missable — that the emphasis has slipped back to activity rather than sporting excellence from the grassroots up. Andy Burnham, now Culture Secretary, is sympathetic to their arguments. But they are already perceived as rich and are asking for large sums — rugby wants £60 million and cricket £40 million — because they have big infrastructure needs.

Would it be better to increase funding for undernourished sports such as handball and volleyball, which have the advantage of being Olympic events in which Britain can automatically field a team? The short-term bang could be worth more for the Government’s buck.

Whatever the answer, Sport England has an impossible task: demands have risen but funding has shrunk. Officials claim a 20 per cent funding increase, but after the diversion of £675 million of Lottery money to the London Olympics, its amalgamated budget may really have fallen from £600 million to £480 million.

And as the funding requests after last week’s deadline are understood to total more than £600 million anyway, the reality is a gap of about £150 million — too big to bridge painlessly.

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