Credit Crunch Forces London Olympic Bosses to Recalculate

London’s Olympic chiefs are having to rework their budgets as the global credit crunch squeezes private funding for the 2012 Games — although Team GB’s success in Beijing has helped boost the coffers.

The government expects about seven billion pounds of private sector money to go into the Olympics and the regeneration of the area around Stratford in east London.

But fears are growing that, as banks worldwide stop lending, developers are struggling to come up with the cash, and taxpayers will have to step in.

The one-billion-pound Olympic Village, which will provide accommodation for 17,000 athletes, is proving the biggest headache as Australia’s Lend Lease, the preferred developer for the project, reportedly struggles to find the money.

A government study published in July warned the deal with Lend Lease — which had hoped to recoup some of its investment by selling on some of the accommodation after the Games — was “significantly affected by the downturn in the financial and property markets since the turn of the year”.