Culture Secretary Tessa Jowell has told MPs that the cost of building the 2012 Olympic Park has risen by £900m to £3.3bn in a revised budget report.
The 40% rise in the construction costs was widely expected with Jowell placing the blame on the rising cost of steel and revising transport costs to take into account inflation. The revised figures also include a £400m bill to pay delivery partner CLM to make sure the Games come in on budget.
The Culture Secretary told the House of Commons committee that the extra cost would probably be paid by a mix of London council tax payers and lottery funds.
The new budget estimations apply specifically to construction and do not include regeneration costs or the running costs needed by LOCOG, the 2012 organising committee.
Jowell did however comment that the responsibility for the unexpected VAT bill attached to the building costs would not be met by taxpayers.
Unsurprisingly, Jowell's announcement was met with disdain from the opposition parties with the Tory shadow Olympic Minister Hugh Robertson stating that the budget had gone 'distrastrously wrong' and that it looked like 'monumental government incompetence'.
The Olympic Delivery Authority and the government are reviewing the original budget for the Games in total and are expected to announce a revised financial plan next February.