The government is warning consumers not to respond to a new type of lottery scam targeting the UK.

The Office of Fair Trading (OFT) claims householders are being hit by a 'fake cheque' scam which comes from the 'Australian Lottery Corporation'.

Consumers receive mail announcing they have won $750,000 but must first pay for taxes and insurance and they are then advised to call an agent for more information.

Attached to the letter is a $4,880 cheque which is described as part of the winnings to cover 'necessary payments' the consumer will need to make.

The cheque is actually counterfeit and can take up to six weeks before it is discovered as it travels through the bank system leaving the consumer to cover the cost of any funds they spend while waiting for it to clear.

"Lottery scams have been around for a number of years but the use of a counterfeit cheque is a worrying development. Scams are becoming increasingly more sophisticated and everyone needs to be on their guard," said Christine Wade from OFT.

OFT advises consumers to take note of warning signs such as winning lotteries you haven't entered and being asked to pay taxes, custom fees, insurance shipping or handling or any other fee before receiving your 'winnings', which legitimate lotteries do not do.