A pair of leading political figures have dragged Anglo-Australian hostilities back into the sporting limelight with a bet and a boast in Beijing. Gerry Sutcliffe, the Sports Minister, and Kate Ellis, his counterpart Down Under, indulged in a spate of sledging that reopened old wounds and led to a string of gibes.

The sparring moved from the sporting fields to the corridors of power as the pair agreed that the minister of the country that finishes lower in the Olympic medal table will have to wear its rival’s national colours at the next big sporting event between the two countries. Sutcliffe, a Manchester United season ticket-holder, said: “It might mean me having to wear an Australian rugby league shirt at Old Trafford, which could be dangerous, but it’s all healthy fun.”

Healthy perhaps, but the pre-Games banter also sparked a large dose of bitterness. “Maybe we missed this, but we weren’t aware that whingeing is an Olympic sport. Nor is dentist-dodging, beer-heating or glassing blokes in pubs,” The Daily Telegraph, the Australian newspaper, said. “Take those activities out of the equation and Britain’s medal potential begins to shrink a little.”

The war of words began when Andy Burnham, the Culture, Media and Sport Secretary, claimed that Britain would enjoy its best Olympics for 90 years. The minister spoke of entering “a glorious new era for British sport” and said that Britain’s medal target of 41 may place them above Australia in the final tally for the first time since Seoul in 1988.

Ellis said that the British were “getting ahead of themselves” and should wait to see what happens during the Games. She also had a word of warning for British ministers regarding unrealistic expectations. “I hope their athletes can handle pressure because their Government is putting it on their shoulders in pretty heavy loads, and I hope they don’t crack under it,” she said.

“Australians, we love a challenge and we love to exceed expectations and to punch above our weight, and that’s something that we have done on sporting fields and particularly in the past decade. The English to this point haven’t really been up there with us.”

Brett Lancaster, an Australia cyclist, has also vowed to do his best to bring down the much-vaunted British cycling team in Beijing. “Remember, nothing’s better for an Aussie than beating the Poms,” he said.

This rivalry between Australia and Britain is nothing new. Last year, Mark Regan, the England rugby union player, told a newspaper that Australia had been “absolutely crap” at last year’s Rugby World Cup and likened the Wallabies’ front row to the Teletubbies. On the Lions’ tour in 2001, Austin Healey called Justin Harrison, an Australia forward, “a plod”, “a plank” and “an ape”.

The confrontation between Sutcliffe and Ellis is more good-natured, but it raises the question of whether Britain’s newfound confidence is well placed. The Government is pumping £600 million into the system in the run-up to London 2012 as it seeks to take advantage of a unique opportunity.

Australia has been there and done that, having invested heavily before the Sydney Games in 2000, but the money and medals tailed off simultaneously afterwards. Australia’s medal haul fell from 58 in Sydney to 49 in Athens four years later and the team have targeted a total of 42 to 48 in Beijing. “[Ellis] thinks we are doing the right thing,” Sutcliffe said. “Post-Sydney, they did not have the investment, but they want to turn it round.”

John Coates, the head of the Australian Olympic Committee, has tabled a plan to overhaul the system in the 2009 federal budget. He believes that, without drastic action, Australia will slip to seventh or eighth in the 2012 rankings. Coates has a separate bet with Lord Moynihan, his British counterpart, that will leave the loser to pay the winner in bottles of champagne for the medal difference in Beijing.

It is debatable whether a win for Sutcliffe would be proof of Britain’s growing influence at the Olympics or Australia’s decline. Australia took 17 gold medals in Athens compared with Britain’s nine. Whatever happens, the unspoken truth is that Britain and Australia have a love-hate relationship based on an abundance of similarities.

England is the most popular destinations for expatriate Australians, the Union Jack remains on the Australian flag and Pom-bashing and Aussie-baiting are key ingredients of the nations’ sporting make-up. However, as ABC News was quick to remind: “Britain has a history of choking under pressure when up against Australians.”

Apart from the past two Rugby World Cups, of course.