Medal spotlight on Australia: Sink-or-swim time for athletes

This may be a question of glasses. Australia's smallest Olympic team for 20 years is arriving in Britain amid rows over how much the swimmers are getting paid, who can sleep with whom in the Olympic village, bitter claims that a 400m runner was overlooked on racial grounds and fears this is all paving the green and not-so-gold way to the worst Australian performance at a Games for more than 20 years.

That's the glass half-empty version. There is another. The 410 Australian athletes scattered across Britain – the swimmers have set up training camp in Manchester – is more than either China or Germany are sending, and only 25 fewer than headed for Beijing four years ago. A projected finish of eighth in the medal table has been recently revised upwards to target fifth place on the back of a swimming team of genuine youthful potential, a revived cycling squad capable of taking on Britain in their own velodrome, and a thin but convincing spread of medal hopes across other sports.

China, despite its slimmed down team of 396, and the US are in a contest of their own at the top of the medal table. Russia will battle Britain for third and fourth, while the host nation is keeping a wary eye on its European rivals, France and Germany. South Korea and Japan have spent heavily on their Olympic hopes; Italy and Ukraine will also look for a top-10 or upwards finish. Australia, meanwhile, seek to finish in the top seven for the fifth consecutive Games. For a country with little more than a quarter of the population of Germany and a third of Britain, it is a remarkable record. Can they maintain it?

One in three of Australia's medals in Beijing came in the Water Cube. Swimming is Australia's Olympic sport but the 47-strong team putting the finishing touches to preparations in Manchester this week is not the force of old. In part that is due to others closing the gap on Australia's women, the mainstay of their Beijing medal tally (the men did not win a gold in 2008), with Britain, Italy, France and Holland stronger than four years ago. At last year's world championships in Shanghai no Australian woman won gold.

In London they will lean heavily on Stephanie Rice, the one genuine big hitter in the women's team, and a couple of veterans – in swimming terms – in Leisel Jones and Libby Trickett, who has come out of brief retirement to compete. Rice, 24, won three golds in Beijing but comes into London dogged by shoulder problems and having finished third in the 400m individual medley, her signature event, at last year's world championships behind Elizabeth Beisel of the US and Britain's Hannah Miley.

At an Olympics, momentum within a team can often prove pivotally important; Rice goes on day one to defend her 400m individual medley title. If she fails it will place ever more pressure on to Australia's biggest hope, James Magnussen, aka "The Missile".

Much rests on Magnussen's broad shoulders. The 6ft 5in 21-year-old was key in both Australian golds in Shanghai, winning the 100m free and firing the freestyle relay team ahead of France and the US. There has not been a great Australian sprinter in the pool since Mike Wenden in 1968 but the ultra-confident Magnussen is a London star in waiting.

Outside the pool the velodrome offers the likeliest chance of quantities of Australian medals. The head-to-head with Britain's much-vaunted track team will provide a Games highlight – at April's world championships in Melbourne, Australia led the medal table but Britain took more golds from the Olympic events.

The feisty Anna Meares is the team's star; her confrontation with Victoria Pendleton, an old and respected foe, will be quick and brutal, while high-speed duelling is likewise certain in the men's and women's team pursuits, an event that has seen the world record reduced with almost each outing Britain and Australia have made in recent months.

Elsewhere there are some world-class athletes who expect gold. Sally Pearson is favourite to win the 100m hurdles despite her tumble at Crystal Palace at the weekend, Mitchell Watt will contend the long jump medals, while Sam Willoughby is ranked No 1 in the world in the BMX. In team sports, hockey and basketball – the women's team, the Opals, have won the last three silvers – there are good podium prospects on offer.

It was in 1976 that not one Australian managed to climb to the top of a podium in Montreal, a collective failure that led to a serious revision in sport funding. That was the spark for the overachievement of the last four Games. It is a path Britain belatedly followed 20 years on after a disastrous Atlanta Games.

However, with greater resources and the funding finally in place, Britain edged ahead in Beijing and with home advantage should stay there in London. But Australia, hosts a dozen years ago, are further down the road in the Olympic cycle; what state will British sport find itself in three Games' time, when the high of hosting the event, and the extra funding that brings, has worn off? If it is in as robust health as Australia's now that will be no bad place to be.

Australian officials insist that squabbles over the Aus$10,000 payment to swimmers, with Aus$35,000 to follow in return for a gold medal, have been resolved. They have also dealt with Russell Marks' moans about not being able to share a room with his wife, another member of the shooting team, and John Steffensen's allegations that he was "racially vilified" in not being picked for the 400m (Marks sleeps on his own; Steffensen will be in London). From their vantage point, the glass is half-full.

Already installed outside Australian HQ in the Olympic village is a large plastic emu. Sitting on its back is a pint-sized kangaroo kitted out with bright red boxing gloves, the symbol of a country clearly looking to punch above its weight one more time.

Show us your medals

Since 1992 Gold Silver Bronze Total

Beijing 2008

GB 4th 19 13 15 47

AUS 6th 14 15 17 46

Athens 2004

GB 10th 9 9 13 31

AUS 4th 17 16 16 49

Sydney 2000

GB 10th 11 10 7 28

AUS 4th 16 25 17 58

Atlanta 1996

GB 36th 1 8 6 15

AUS 7th 9 9 23 41

Barcelona 1992

GB 13th 5 3 12 20

AUS 10th 7 9 11 27