The World Festival of Youth Culture is being planned by London 2012, the company responsible for the capital's Olympic bid. It would begin in 2008 and would be aimed at 13- to 30-year-olds.
London 2012's plans include offering small grants worth between 500 and 5,000 for cultural projects, possibly through the lottery, and a UK-wide programme of youth culture events.
The festival would culminate with a grand finale in London's East End.
Ideas gathered from young people include workshops on social issues and a recruitment fair to help young people get Olympic-related jobs.
It is hoped a festival could take place regardless of whether London wins its Olympic bid. A formal proposal is due to be launched this summer.
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