Page last updated at 20:12 GMT, Wednesday, 13 May 2009 21:12 UK

Olympic village handed more funds

Artist's impression of the Olympic Village
The village will house athletes during the 2012 Games

The Olympic village is to be publicly-owned after the government said an extra £324m of public funds will be used in the project.

The £1bn village, which includes 2,800 flats, was initially a privately-funded project but was switched to a public-private financed initiative.

Olympics Minister Tessa Jowell said private funding had been rejected as it was "not a good deal" for the taxpayer.

The government said the money would be paid back after the flats were sold.

Ms Jowell said: "By funding the entire project, the village will become publicly-owned and the public purse will receive substantial returns from sales."

The lack of private-sector funding for the athletes' village is a direct reflection of the severity of the current economic downturn
Hugh Robertson, shadow Olympics minister

She added the Olympic Delivery Authority (ODA) may pursue deals from investors when the site is nearly finished, but this depended on the economic climate.

The £324m includes £261m from a contingency fund and £63m from savings elsewhere in the project.

A further £268m will also be invested from a deal with Triathlon Homes to sell affordable flats at the village.

Shadow Olympics minister Hugh Robertson said the decision was "a cause for concern".

"The lack of private-sector funding for the athletes' village is a direct reflection of the severity of the current economic downturn," he said.

"As soon as markets improve, it must be sold to the private sector and today's outlay recouped for the taxpayer."

A private sector deal from contractor Lend Lease and its banking consortium was rejected after ministers decided it was not in the best interests of the tax payer.

The company had been prepared to invest up to £150m in equity and £225m in bank debts to finance the construction.

It was originally intended to be paid for investors



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