Everyone in England who tests positive for Covid-19 could automatically be given £500 as part of plans to boost quarantine compliance.

The proposal is said to be the “preferred position” of the Department of Health and Social Care (DHSC), according to a leaked sensitive document seen by The Guardian.

The overhaul, the paper reported, has been prompted by Government polling indicating that only 17% of people with symptoms are coming forward for testing, while just one-in-four comply with rules to self-isolate for 10 days after testing positive and 15% continue to go to work as normal.

The £500 handout scheme would cost up to £453 million per week – 12 times the cost of the current system.

The Resolution Foundation, a think tank which has previously calculated that only one in eight workers qualify for the financial support currently offered to those told to self-isolate, welcomed the proposal.

Researcher Maja Gustafsson said: “The current approach is not fit for purpose with statutory sick pay among the least generous of advanced economies and far too few people eligible for the £500 support payments.

“Swiftly putting in place a much more universal and generous system will make a real difference to controlling the spread of the virus.”

The DHSC said it would not comment on a leaked paper but did not deny that blanket self-isolation payouts had been mooted.

A Government source suggested it was just one of many options being discussed as part of improving stay-at-home compliance for those who had tested positive.

“We are in one of the toughest moments of this pandemic and it is incumbent on all of us to help protect the NHS by staying at home and following the rules,” said a DHSC spokesman.

“All local authority costs for administering the Test and Trace support payment scheme are covered by the Government, and each authority is empowered to make discretionary payments outside of the scheme.

“£50 million was invested when the scheme launched, and we are providing a further £20 million to help support people on low incomes who need to self-isolate.”

Meanwhile, the Prime Minister refused to rule out the lockdown lasting until the summer, while Home Secretary Priti Patel said it was “far too early” to speculate on whether restrictions would be lifted in time to allow Britons a foreign holiday during the warmer months.

The Government’s caution in announcing a timetable to ease the lockdown has sparked fears in the hospitality industry that ministers could be preparing to tell pubs and restaurants to keep their doors closed until May, despite the Government aiming to have vaccinated all the most vulnerable by next month.

As 1,290 further deaths were reported on Thursday, and experts modelling the pandemic suggested there could be a huge surge in cases if restrictions were lifted too early.