The British tradition of national lottery has been traced back to the 16th century — when a jackpot of £5,000 was up for grabs and participants had to wait three years to find out if they were winners.

A letter has emerged from Queen Elizabeth I, written in 1566, which gives instructions for collecting money, commanding that persons of 'good trust' be entrusted with the prizes.

The letter was written to Sir John Spencer, advising of 400,000 lots, each costing 10 shillings, with prizes to be paid in a combination of gold and merchandise, including tapestries, linens and fine fabrics.

The jackpot of £5,000 is equivalent to £850,000 pounds today (US$1.3 million), and part of the money raised from ticket sales went to good causes, as is the case in today's lottery.

The letter states: 'Where we have com[m]anded a ceratine carte of a Lotterie to be published by our Shirif of Countie in the principall townes of the same...' And continues: '...it is expedient to have somme persons appointed of good trust to receave such particular sommes as our subjects shall of their owne free disposition be ready to deliver upon the said lotterie.'

Monies raised, it states, shall be 'employed to good and publique acts and beneficially for o[u]r Realme and o[u]r Subjects.'

The letter states that out of every pound sterling, Spencer was allowed sixpence to pay the collectors.

It also stated that he was to issue books of numbers and tickets.

As a final incentive to Spencer, for every £500 pounds sent to London, a further 50 shillings was promised to him.

The draw was not held until three years later 1569, due to a lack of support and the logistics in selling the tickets around the country.

This lottery died out but there were similar draws held between 1750 and 1826.

The letter, which is signed with Elizabeth's distinctive flourishing signature, is expected to sell for £20,000 - four times the original jackpot — at auction.

Richard Davie, from International Autograph Auctions, who is selling the letter, said: 'This letter shows that the idea of a lottery to raise money is nothing new.

'Tickets were sold and a jackpot was drawn and the money raised was intended for good causes.

'It was exactly like the one we have today, although they didn't have scratch cards.

'This was not an instant success because the draw did not happen until three years after Elizabeth sent her instructions to Sir John Spencer.

'The letter includes a good blind embossed paper seal and is two pages long with her distinctive, flourishing signature.

'It is a unique item and highly collectable. It has been put up for sale by a collector and there will be interest from a number of enthusiasts.'

The sale is on Sunday at the Edwardian Radisson Hotel at Heathrow in London.

(Click to display full-size in gallery)A letter from Queen Elizabeth I instructing Sir John Spencer how to carry out Britain's first national lottery is to be sold at auction.

(Click to display full-size in gallery)Queen Elizabeth instructed that 'persons of good trust' be entrusted with the lotto prizes.

Thanks to myturn for the tip.