Olympics Desk

The credit crunch is hitting the 2012 games in the capital with the latest revelation that the Olympic village is now having serious funding problems following an announcement by Lead Lease the Australian company building the village that it is £750m short of funds.

The government is expected now to try and raise the £750 million shortfall via a meeting it was revealed in The Observer on October 15 at the Treasury were options will be looked at including putting pressure on government departments to come up with the cash.

The total cost of the construction of the Olympic village is estimated at £1 billion, with Lend Lease committed to come up with £250 million of its own money and the rest via banks.  Lend Lease have failed to raise the rest of the money and are now looking for the intervention of the government to help bridge the gap.

Crucially also, and what is worrying many with in the 2012 Olympic team in London is the legal agreement that Lend Lease have signed to fund the Olympic Village runs out in three months.