Australian Open organisers Tuesday boosted prize money to a record Aus$30 million (US$31.1 million) as they responded to threats of a boycott from players agitating for a greater share of revenue.
Tennis Australia chief executive Steve Wood said the Aus$4 million hike for the 2013 event was the single biggest increase in the history of the opening Grand Slam of the season.
"We are proud to announce this major increase in prize money," he said of a rise that makes it the sport's richest-ever tournament.
"We have led the world in prize money for these incredible athletes and we want to ensure that the Australian Open continues to make a major contribution to the financial wellbeing of professional tennis players."
It follows reports in August that players on the ATP Tour, which runs the men's game, were considering a boycott of January's tournament to try to gain a higher percentage of Grand Slam event revenues for themselves.
At issue is the pay of lower-ranked players, who often exit in the first round after making the long journey Down Under.
While this year they pocketed Aus$20,800 ($21,600 US) for a first-round defeat at the Australian Open, some players struggle to make ends meet during the year as they pay for much of their own expenses and travel.
Without a high profile, they are also unable to score lucrative sponsorship deals that could help sustain their careers.
Wood said Tennis Australia officials were seeking further input from the players about a fairer distribution of the prize money.
"We are supporting the lower-ranked players in their quest for compensation," he added.
Australian Open director Craig Tiley said the prize money break-up would be determined after he meets ATP players' council representatives including Roger Federer, Novak Djokovic and Andy Murray in Shanghai this weekend.
But he said the increases would be weighted towards those who lose in the early rounds, adding that the reaction so far from players was good.
"They were very appreciative that the Australian Open has again stepped up, given them the number and gone significantly higher than probably they were expecting," he told reporters at the tournament launch at Melbourne Park.
ATP chief Brad Drewett said he was encouraged by the move.
"We welcome the increase in prize money for the 2013 Australian Open and acknowledge the ongoing efforts of Tennis Australia to recognise the role of the players in the success of the tournament," he said in a statement.
"We also look forward with confidence to continuing these successful discussions with a view to a longer-term understanding."
When reports of a possible boycott emerged, Tiley said he did not view them with alarm, and made clear the prize money issue was not just a Grand Slam problem.
"It's an all-sport problem and I think the entire sport needs to sit down and help address the issue, because at the lower ranks of our sport the prize money hasn't changed in 25 years and that's just not good enough," Tiley said.
In other Australian Open news, organisers said the Hawk-Eye line-call system will be used on five courts next year, up from three previously.
They also said a third retractable roof, currently being built on Margaret Court Arena, will be in place for the 2015 event. The event already has retractable roofs on the Rod Laver Arena and Hisense Arena.