The massive cash windfall will allow the 18th-century cottage in Helpston, near Peterborough, to teach thousands of children each year about the incredible life of the city's greatest poet.

The John Clare Cottage will be fitted out to tell the story of the poets' life by recreating many rooms to how they would have looked during his lifetime there in the early 1800s.

A nearby dovecote will also be transformed into a reception area, shop and gallery space, while a small new building will be created to house toilets for visitors.

The funding from the Heritage Lottery Fund will also pay for a manager and education officer for five years, who will help turn the cottage, which is now closed to the public, into one of the region's major tourist attractions.

Paul Chirico, chairman of the John Clare Trust, which has raised £250,000 towards the project, was delighted to hear it had secured the crucial lottery cash.

He said: "This is a major pledge of lottery money, which will substantially add to what we can do in Helpston.

"It gives the stamp of approval to the project, which will help tell the story of John Clare, and also tell about the environmental changes we have witnessed over the years.

"It gives us a base to ensure that Clare's love of nature and inspirational life story can be made available to many more generations."

And the announcement of the lottery money comes just one week before the 25th annual John Clare Festival, which starts on July 14.

It will see hundreds of people flock to the picturesque village for a series of events to mark the birthday of the literary genius, whose poems about the countryside near Peterborough have won him legions of fans.

The money will cover the £500,000 loan taken out by the trust to buy the cottage in November, and comes in addition to a recent £120,000 donation by waste disposal company Augean, which operates sites in King's Cliffe and Thornhaugh, near Peterborough.

Robyn Llewellyn, regional manager for the Heritage Lottery Fund, said he had been impressed by the ambitious education aims of the project.

He said: "It will be extremely beneficial to local people and visitors alike. John Clare's historic cottage can now be turned into a tourist and education centre.

"There is a wealth of heritage in this city and we are thrilled to help preserve and open it up for everyone to enjoy."

Barry Sheerman, an MP for Huddersfield, who has championed the project, was also delighted by the news.

Mr Sheerman, who is chairman of the House of Commons Select Committee on Education and Skills, said: "This project will safeguard the birthplace of our most important poet of nature.

"It will also create a wonderful new centre for exploring our relation to the environment in Clare's time and our own."