Ministers handed over another sizeable chunk of contingency reserves to London 2012 organisers and put the entire £1.1bn Olympic village into public ownership after rejecting a proposed £375m debt-plus-equity contribution from a private developer.
Under the latest drawdown from the £2bn Olympic contingency fund, £324m has been handed over to the Olympic Delivery Authority, the body responsible for games construction, for funding the village, following a £326m sum handed over in January.
It leaves £1.3bn of contingency unspent, although the ODA estimates it will require £703m of that. Tessa Jowell, the Olympics minister, said the £9.3bn overall Olympic budget remained unchanged. 'It will not be exceeded,' she said.
The Olympic village was originally intended to be wholly private-funded, but the credit crunch made it impossible for Lend Lease, the ODA’s project partner, to raise funds.