As Building went to press, intense negotiations were continuing between the Olympic Delivery Authority (ODA) and the government over which of them would manage the contingency funds for the Games.
This has been one of the main bones of contention between the communities department and the ODA in the planning of the Games.
The budget for the London Olympics is likely to be fixed at £9.3bn with the construction costs set at about £5.1bn; the construction contingency fund is about 20% of the construction cost.
A source close the negotiations said the ODA was not happy about the levels of contingency in the budget. The source said: “We’d have liked it to have been more, as it has to deal with material price fluctuations and any other incidents, such as rebuilding resulting from a security incident.”
The source added that the second issue was who should control the fund. The source said: “Treasury will want to manage this closely, but the ODA may well believe that it will struggle to cost and manage the programme unless it can control overspend.”
Tessa Jowell, the culture secretary, was expected to reveal the estimated cost of the 2012 Olympics yesterday after the weekly Cabinet meeting, however it is understood that this depends on the the achievement of an agreement over the management of the fund.