Richard Branson will not be compensated for his failed bid to run the National Lottery.

The National Lottery Commission has rejected his call to be reimbursed following the failure of his People's Lottery bid to beat Camelot.

The commission issued a statement on Friday through its lawyers, Freshfields Bruckhaus Deringer, saying it has selected the next operator on a rational basis after a fair and proper process.

A spokesman for the commission said Branson's company had always been aware that they would have to bear the costs associated with their bid if they were unsuccessful.

"The Commission does not accept that it has any obligation to compensate The People's Lottery. There is simply no legal basis for the claim," he said.