By Chirag Trivedi
BBC News Online, London
Holding an Olympics in London would provide a much needed boost to some of the city's most deprived areas.
An 80,000-seater stadium will be built at Hackney Stadium
If the international Olympic Committee decides to hand London the chance to hold the 2012 event, then an 80,000-seater stadium will be built at Hackney Stadium in Stratford, east London.
It is hoped it will provide at least 9,000 new jobs and 4,000 new homes for an area which has an unemployment rate of 11.7%.
This compares to a national average of 5.1%.
The Olympic village, which will house up to 20,000 athletes, coaches and officials, would probably be built in Hackney, east London.
The borough, which has been plagued by gun crime, has one of the highest crime rates and an unemployment rate of 12.2%
Culture Secretary Tessa Jowell said a public funding package of £2.375bn would be put together for
the Games, with London residents providing £625m through a £20 increase in council tax.
But John Whittingdale, the shadow culture secretary, queried how long increase would last.
"It is only fair that those who have the most to gain from the Olympic Games should make the greatest contribution to its cost," he said.
"How can you justify council tax supplements for those in boroughs the other side of the Lea Valley?"
Council leaders in Tower Hamlets and Waltham Forest hope to take advantage of the influx of tourism attracted by the Games.
Newham's mayor Sir Robin Wales said: "An Olympic bid could provide a huge boost to the regeneration of Newham and we will be working hard to maximise the opportunities for local people.
"Our ambition is for the 2012 Olympic Games to be remembered, not just for providing a spectacular, world-class sporting festival, but also for bringing long-lasting benefits to the people of east London."
But Hackney's mayor, Jules Pipe, was more cautious.
"Hackney would only benefit if appropriate infrastructure was in place. At present this is not the case.
"It is vital for there to be a Tube link from central London to Hackney.
"We need to look beyond the Olympic Games to focus on delivering the regeneration that the borough needs and ensuring facilities built for the Olympics will contribute to this.
"Only then would such a scheme lead to a lasting regenerative legacy for Hackney."
Local people have given a mixed reaction to the possible bid.
David Vail, from Clapton in Hackney, said: "Hackney has very high unemployment.
"The Hackney Wick site, which is earmarked for use in the Olympics, has plans for high density employment.
11,000 athletes will compete in 300 events over 12 days
20,000 journalists will arrive to cover the event
Nine million tickets will be sold
500,000 spectators will move across London every day during the Games
Staging the Games will involve 63,000 people
"These will be scuppered by the Olympic bid.
"Hackney desperately needs jobs and, in the best case scenario, the Olympics would stop a lot of investment for a number of years until it is clear that the bid is unsuccessful.
"Taken with the absence of guarantees about protecting the environmentally-sensitive Lea Valley the Olympics is a disaster for the East End."
One woman who lives in East Ham, Newham, told BBC London: "To me the Olympics will gloss over all the problems of the area, the unemployment, the crime and the poor hospitals.
"And what happens to the residents when the Olympics have gone? We will be forgotten like we always have been."
But Phill from Croydon, south London, said: "It would be a great international sporting occasion and would act as a catalyst to regenerate a poor part of east London.
"It will be a battle between London and Paris, and if we go for it, it might persuade the government to finally back Crossrail."
Key to the success of the project are transport links.
Mayor Ken Livingstone is understood to be seeking funding for extensions to the London Underground to help get the expected hundreds of thousands of spectators to venues and around London.
The biggest benefit could be the official go-ahead for Crossrail - the £15bn rail link from Paddington in the west to Liverpool Street (and possibly beyond) in the east.
Transport Secretary Alistair Darling is still unwilling to commit the government completely to the scheme, which would connect existing mainline services and which Labour MPs in east London are crying out for.
The British Olympic Association is worried that Crossrail and the Games are becoming too closely linked and have insisted that their bid can go ahead without the rail link, which is unlikely to be completed before 2011.