Wales international Bale, 21, and who notably scored a hat-trick for Tottenham against Inter Milan in the Champions League this season, is likely to be picked for the Great Britain team if he maintains his current fine form in the Premier League.
But that selection would be opposed by the FAW, who last week reiterated their stance on the selection of any Welsh player for London 2012.
They fear releasing players for a British team will jeopardise their status as an independent nation within FIFA a position shared by the FAs of Scotland and Northern Ireland.
But the British Olympic Association, who have given the English FA responsibility for administering the team, are adamant there can be no discrimination in the selection of the squad on grounds of nationality.
"If Gareth Bale is eligible for selection, and if the FA determine that he is the best for the team, then he'll be selected - I would expect him to be," Lord Moynihan told London's the Evening Standard.
"If they (the FAW) take sanctions against a player then the player would have recourse to the courts on discrimination grounds.
"If players felt they were being excluded for any reason other than merit, they would absolutely be able to challenge that decision."
Bale expressed a desire to play in the Olympics earlier this season, saying: "The Olympics would be a great opportunity for a young player like me to play in a major tournament.
"We all know Wales don't tend to qualify for too many of the big occasions."
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