Alistair Darling bowed to the credit pressures weighing on the London Olympics and agreed yesterday to bail out two of the biggest building schemes for the 2012 games, handing over a quarter of the £2bn set aside in contingency reserves to keep the project on track.

The chancellor agreed to release £394m from the contingency fund, while a further £67m is being taken out of a separate contingency pot set aside by the Olympic Delivery Authority, the body responsible for the games’ infrastructure.

The £461m handed over yesterday means that barely £1.5bn is left to meet any unforeseen problems arising in the next three-and-a-half years if the government is to keep its promise to stay within the overall budget of £9.3bn for the Olympics.

Financial Times