Australia will throw more money at top medal prospects to prepare for the 2016 Rio Olympics after the sports-mad nation slumped to its worst medal tally in 20 years at the London Games.

Sports minister Peter Dutton said 650 of Australia’s best athletes would benefit from a newly designed programme that reallocates A$1.6 million ($1.5 million) directly to the brightest medal hopes and emerging talents.

That would come from a re-designed Direct Athlete Support (DAS) programme of A$48 million over four years, Dutton said in a statement.

The means-tested scheme would mean the top medal prospects could be in line for up to a 30 per cent hike in funding, he said.

“More direct funding through the Australian Institute of Sport for potential Olympic, Paralympic and Commonwealth Games medallists is an important part of Australia’s plan to remain on the podium of world sport,” Dutton said.

Australia has traditionally punched above its weight at the Olympic Games, finishing sixth in the medals table at the 2008 Beijing Games and fourth at Athens and Sydney, but the 10th-placed haul at London prompted local media to slam sports authorities for wasting taxpayers’ money.

Australia has set itself a target of returning to the top five at the next two summer Olympics, while producing at least 20 world champions annually.