Extra cash released for London 2012 village

The British government released £95 million of contingency funds on Wednesday to keep work on the London 2012 athletes' village on track.

Olympic chiefs warned last week the credit crunch could result in a 250 million pound shortfall in the public-private sector project.

The Olympic Delivery Authority (ODA), the body responsible for building the venues, has been given the interim payment from the government's overall 2.7 billion pound contingency fund.

Australian developer Lend Lease acknowledged in June there had been delays in securing financing, but said it expected to finalise arrangements by the end of the year.

The ODA said in a statement: "Discussions on long-term funding arrangements are continuing in what is clearly a very difficult economic environment.

"We will update on progress in the coming weeks and months."

Work on the estimated 1 billion pound village in east London continues on schedule, the ODA said.

The economic downturn has also impacted on the planned number of post-Games apartments.

The slump in housing prices, which could damage the chances of recouping money from the village after the Games, has seen the number of apartments reduced from 4 200 to about 3 000.

Failure to secure funding could result in the government providing more contingency money on the understanding the taxpayer owns a considerable stake in the housing stock.

The government is also looking at moving the temporary badminton and rhythmic gymnastics venue to a permanent site to save costs.

Fencing has already been switched to a shared venue, while the temporary shooting, basketball and equestrian sites are under review.

Badminton and rhythmic gymnastics, which was to be staged at a new 6 000-seat venue in Greenwich, south east London, may be moved to the Wembley Arena in north west London, the BBC said on Wednesday.

An ODA Spokesperson said: "Clearly in the current economic climate it is prudent to look at our temporary venues to see what other alternatives may exist using permanent structures.

"This process is under way. No decisions have been made and it is by no means definite that these sports will move but, in the current economic climate, examining all options is the sensible thing to do."