Australian Olympic Committee president John Coates felt it would be very difficult for Australia to retain a top-five Olympic position in Beijing with the likes of Britain and Germany making advances.

Coates felt the money being thrown around by the European heavyweights could flow through to the medal tally at the 2008 Games and potentially demote Australia from the fourth spot it recorded at the last two Olympics.

"Germany has finally got its act together after unification, it has never been as strong as the two Germanys were separately," Coates said at the launch of January's Australian Youth Olympic Festival (AYOF) in Sydney.

"This year in the benchmarks we do, Germany which has only been one or two medals behind us at the last two games has gone ahead of us.

"When we add the swimming and track and field results I think we will end up fifth this year.

"It (finishing in the top five in Beijing) is a realistic objective, but a lot of money is being spent in a lot of other countries in terms of funding."

Britain, set to host the 2012 Games in London, has made significant gains since the funding from lotteries flowed through their sporting coffers over the past decade.

"Britain has set the goal of finishing fourth (at the 2008 Beijing Olympics), which means replacing us and there's a lot of friendly rivalry between us," Coates said.

The AOC boss revealed the AYOF is set to expand and add a winter games to the well-established summer event.

The fourth AYOF will take place in Sydney from January 17-21 next year with more sports and athletes than ever before.

Around 2,200 athletes and officials from 23 nations spanning five continents will descend on Sydney with a record tally of 16 sports contested.

The tally of sports has increased from 10 at the inaugural AYOF in 2001 and Coates hoped to add even more in the future.

Soccer and sailing have been added to the AYOF program for the first time along with two winter sports, figure skating and short-track speed skating.

Coates said while economics made it unlikely the AYOF could embrace all team sports, he revealed there were plans afoot to stage a separate winter competition.

He said he hoped the AYOF winter competition could start in around four years, depending upon the completion time of a proposed indoor ice rink in Melbourne's Docklands.

"If the indoor ice rink is completed in Melbourne we will move to a winter games as well, using the NSW and Victorian snow fields and the (Docklands) indoor venue," Coates said.

"The government has approved this new indoor ice rink which can do all the indoor sports, but it hasn't been started yet."

Among the countries invited to next year's AYOF, China will send its biggest team so far, containing 294 athletes and officials.

"The Brits have embraced it. Obviously they are putting a lot of money into sport now."

A total of 28 Australian AYOF representatives competed for their country at the 2004 Athens Olympics, where they won a total of eight medals.

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