Olympic bosses are in talks over creating an organisation to take charge of the regeneration of the lower Lea Valley after the 2012 Games.

The news came as the London Development Agency (LDA), which owns much of the development land, poached the man credited with regenerating a large part of east Manchester after the 2002 Commonwealth Games.

Tom Russell, the chief executive of urban regeneration company New East Manchester, will start at the LDA in January as group director of Olympic legacy. He replaces Ted Kyzer, who resigned in October after less than a year in the role.

Building understands that a big part of Russell’s role will be to work up plans for regeneration after the Games.

Discussions over the nature of the body are at an early stage, but a source said: “I think Russell will need some convincing that anything but than a standalone vehicle is required.”

It is possible that a body would be set up that ‘would last in perpetuity’

The LDA is to use proceeds from the sale of the Olympic site to offset its Olympic expenditure. A source at the Olympic boroughs said it was possible the body “would last in perpetuity”.

Meanwhile, six bidders shortlisted to masterplan the legacy development are to be interviewed next week. A winner is to be chosen in January.

In other Olympic news, David Higgins, chief executive of the Olympic Delivery Authority, told a select committee this week that “a substantial part” of the £2.7bn contingency budget would be spent on construction.

Tessa Jowell, the Olympics minister, will update parliament on the Games’ budget on Monday.