The government has admitted "more work" needs to be done to tackle problems with school sport.
Sports Minister Hugh Robertson told the BBC that new policy on the issue should be unveiled in the coming weeks.
"We know there's an issue. We're hoping to make an announcement in the new year and we aim to get this sorted out," he said.
The BBC understands part of the new policy will focus on additional funding for more training of PE in schools.
Money to release sport specialists to work in primary schools one day a week runs out at the end of this academic year.
Despite record levels of investment in grassroots and elite sport, questions have been raised over whether the government has built on the potential of the London Games by devising an effective strategy over school sport.
But Robertson said: "The challenge to those who criticise us is that they very often criticise us without taking into account the prevailing economic conditions.
"Anybody who wants more money put into school sports really has to tell us where its going to come from, and in the absence of that their arguments do lose some of their weight."
The government has faced criticism over Education Secretary Michael Gove's decision to axe £162m in ring-fenced funding for a national network of local School Sport Partnerships (SSPs).
Following protests over the plan, there was a partial reversal of the decision, but funding was still cut by 69%, and only guaranteed until next year.
Research has since shown a 60% drop in the time dedicated to organised school sport, and found a third of children leaving primary school are now obese or overweight.
A requirement for all pupils to have at least two hours of PE a week was also ended, along with the School Sport Survey, which monitored activity, amid concerns over excessive bureaucracy.
The government say they are spending £1bn on youth sport over the next five years through Sport England, and extending the School Games, a scheme intended to boost the number of pupils participating in competitive sport, and which was set up to replace SSPs.
Meanwhile, the Prime Minister has said competitive team sports will be made compulsory for all primary age children.
But John Steele, chief executive of the Youth Sport Trust, told the BBC, "If we are really serious about inspiring the next generation following the London 2012 Olympics and Paralympics, the foundations of this need to be laid in schools.
"This can't just be about improved sporting opportunities, it has to be a holistic approach to physical literacy, health and wellbeing as well as the wider gains that can be made from competitive sport.
"It is something which requires cross-government assurances and commitment."
In a new action plan, Labour this week called for the target of two hours of PE a week to be reinstated.
Meanwhile, the head of the Sport & Recreation Alliance accused the government of paying "lip-service to the importance of sport".
Research shows that teachers receive an average of just 10 hours of training on how to instruct PE.
Lord Coe, who is advising the Prime Minister on Olympic legacy has admitted his "frustration" at the failure to plan better for school sport.
Meanwhile, Robertson defended the government's record on elite and grassroots sport.
He said: "If you look at sports legacy coming out of London 2012 we've done extraordinarily well in the funding we've got to elite level athletes.
"The community piece is better structured, better organised and sports know what they have to do in the way they didn't know before. There is money in that part that has ever been the case before. The major sports events strategy is going fantastically.
"There is more work to be done over school sport."