The £9.3bn London Olympic budget is under pressure as the financing costs of key facilities rise sharply. The Observer

Negotiations to pay for the Olympic village are running into problems because of banks' reluctance to release cash in the wake of the credit crunch.

Causing immediate concern is the £850m financing package for the 3,300 flats that will soon be built for athletes.

Funding should have been agreed by now but is still some way from sign-off. The Olympic Delivery Authority is putting up half the cost. The remainder is to be debt-financed through Lend Lease, the giant Australian developer that won the bid to build the village.