One of the government's earliest health policy ideas is showing signs of coming to fruition with the announcement of the first healthy living centre to be funded by the National Lottery.

The£1m St Augustine's healthy living centre in Norfolk will build on the work of voluntary organisation the North End and North Lynn Community Trust and provide horticultural therapy, arts, crafts and play areas alongside a GP surgery, health promotion and advice services.

The Labour Party came up with the idea of healthy living centres, paid for by the Lottery, in the dying days of the 1997 election campaign.

Lottery cash distributor the New Opportunities Fund denied that the trust's seven-year track record in promoting community projects on health, welfare and employment meant that less polished bids would be rejected.

Director of policy and external relations Vanessa Potter said: 'It is a difficult issue. We know that some of the most disadvantaged areas aren't going to have any community resources at all.'

NOF plans to review the first batch of healthy living centre applications next year, 'looking at the types of activity, the geographical locations and groups to identify so that where we identify gaps we might be able to support and develop bids'.

It has already published a list of priority areas in England based on deprivation indices against which bids will be compared.

NOF will also be working with statutory agencies nationwide to identify the most neglected areas, which would be 'strongly encouraged' to apply for funding.

'We are expecting to end up with a pretty mixed portfolio, ' said Ms Potter, who is determined not to 'rush in and fund all the applications coming in at the moment'.

The final deadline for part of the£300m available is 2003, with funding available for up to five years. So far, NOF has received about 300 first stage bids, and is expecting the next 12 months to see 'a lot more coming through'.

St Augustine's HLC in Norfolk will be based at a disused sports and social club in North Lynn, and managed by a trust set up with a donation from a closing canning factory.

Despite sharing a constituency with Sandringham, the area itself is in a ward ranked as one of England's most deprived.

Trust manager Lin Twell said: 'I think we got it because we had developed a range of services which attacked deprivation in lots of different areas.'