Greater London Authority has been locked in talks with the Treasury over transfer, and is preparing for 'worst case scenario' of deal not being struck

The Greater London Authority has admitted that it may not secure a deal with government over the ownership of Olympic land before the general election, throwing mayor Boris Johnson's Olympic strategy in to doubt.

Neale Coleman, director of London 2012 co-ordination at the GLA, said he was “still confident” the issue would be resolved before the election, but that it couldn't be guaranteed. He said the London Development Agency (LDA) was preparing for a worst case scenario where no deal is struck.

The LDA, part of the GLA group, has been locked in negotiations with the Treasury for almost a year regarding the transfer of the land it bought for the Olympic Games in east London to the new Olympic Park Legacy Company headed by Margaret Ford. The LDA will ultimately have borrowed £780m to pay for the purchase and remediation of the land by the time of the games, and is looking for the government to pay it about £500m to take it off its hands. This would ensure the land would arrive at the OPLC unencumbered by large debt payments, allowing the organisation to use the land as an asset to encourage development.

Coleman said a final deal was being held up over continuing disagreement over the “financial terms” of the deal. He said it related not just to the price, thought to be in the region of £500m, but also to the terms of the deal, such as which organisation would receive future land receipts from land sales.

However, he said an issue of the ownership of the OPLC, currently a 50-50 deadlock company between the Treasury and the LDA, was now “no longer a stumbling block” to reaching agreement. Coleman's answers made it clear Treasury had sought to gain a controlling influence over the firm in return for the purchase. Coleman said: “We set up this organisation quite deliberately as a 50/50 vehicle. This is a bottom line for us so we can make sure it is driven primarily for achieving the best regeneration outcome for London, rather than a narrow financial benefit for central government.

“I don't think this is any longer an obstacle to reaching agreement.”

Coleman said mayor Boris Johnson had met with ministers on a number of occasions to press the need for an agreement before the election. However, he denied there was an immediate risk of the OPLC becoming paralysed if an agreement didn't materialise.

The news comes as Margaret Ford, the chair of the OPLC, this week admitted that up to another £450m would have to be found to prepare the site for development after the Games had finished. Ford told a committee of MPs the money was needed to supplement the £350m the Olympic Delivery authority was spending to after the games to rebuild the site.

She also said the negotiations were continuing over the occupier for the Olympic