Holmes's two golds cause turmoil in honours system

The extraordinary success of double-gold winner Kelly Holmes is causing consternation in the Whitehall unit that hands out honours.

According to an unofficial rule thrashed out after the Sydney Olympics, the 34-year-old national heroine should receive a CBE in the New Year's Honours.

However, the "senior honour", one rank below a dame-hood, is considered too generous for an athlete who has only just been given an MBE, the most lowly honour.

One official involved in the negotiations said: "The Cabinet Office will resist giving Holmes a CBE. They think honours are given away too cheaply to sporting figures."

Fans are likely to be outraged if the winner of the 1,500m and 800m races is created only an OBE. There is already a campaign among her supporters to make Holmes a dame.

The so-called "Sydney formula" means that medal winners are moved up one rank for each gold they win. Holmes's two medals mean that she should leapfrog an OBE and be made CBE. The formula also means Matthew Pinsent (pictured) is almost certain to be knighted for his fourth gold medal in Athens. However, even this is problematic, since Whitehall is eyeing nervously the prospect of Pinsent winning a fifth gold in Beijing.

The Government was forced to announce a review of the honours systems after the inner workings of the ceremonial unit in the Cabinet Office were laid bare in a series of leaks late last year. It was found that figures like Tim Henman were added to the list to ensure media interest.

Honours for sporting success have always caused controversy and often proved a hostage to fortune. Sir Clive Woodward was knighted while the euphoria over England's Rugby World Cup win last year was still high. But last week he resigned as the team's coach after falling out with the Rugby Football Union.

The England football captain, David Beckham, was made an OBE last summer but has since seen damaging allegations about his private life publicised and his England performances criticised.

Beckham has yet to win anything with the national team, but it was only in 2000 - 34 years after their triumph - that the five "forgotten heroes" of England's 1966 World Cup winning squad, Nobby Stiles, George Cohen, Alan Ball, Roger Hunt and Ray Wilson, were finally honoured with MBEs.

The swimmer Judy Grinham, who won gold in the 1956 Melbourne Olympics, has yet to receive any honour.

Olympic javelin champion Tessa Sanderson, who in 1984 became the first black woman to win a gold for Britain, was made a CBE in 2003 on top of an MBE and OBE - leading to complaints that honours were being "recycled". The CBE, for work as vice-chairman of Sport England, also provoked controversy because Trevor Brooking, who spent four years as chairman of the organisation, had not been honoured. He was subsequently knighted in June.

Former sports minister Kate Hoey said: "The whole honours system for sporting success is a minefield. The whole thing needs to be sorted out. It's always been difficult to work out what to do with Olympic medallists."

A spokesman for the Department for Culture, Media and Sport declined to be drawn on the implications of the new crop of Olympians. "Ministers have yet to turn their attention in that direction," he said.

Meanwhile, London's bid to host the 2012 Games depends, in part, on the attitude of cities such as Manchester and Liverpool. The International Olympic Committee is to conduct polls outside the capital to assess whether the bid has genuine national support.