Prime Minister Tony Blair has said the Olympic Games will "showcase London at its best".
He was speaking at Trafalgar Square where crowds had gathered to celebrate the first anniversary of the city winning its 2012 Games bid.
London mayor Ken Livingstone dismissed concerns the £2.375bn project will not be brought in on budget.
A bus was also launched that will take the Olympic message across the UK as a part of the 2012 Games Roadshow.
The prime minister and the mayor were accompanied by leading figures involved in planning for the Games, including Chairman of the London 2012 organising committee Sebastian Coe.
Double Olympic gold medallist Dame Kelly Holmes and other sporting stars were also present are at the event to launch a roadshow around the UK.
The double-decker bus, plastered with images of British Olympic stars, will make 50 stops on its 3,000-mile journey - ending in Liverpool on 27 July, exactly six years before the opening ceremony in Stratford.
There have been concerns about whether the Games can be delivered to budget.
A report in The Times newspaper suggests the cost of regenerating east London is to rise by more than £1.5bn in order to put in sufficient infrastructure to support a new city, rather than a short-term fix for the Games alone.
"I have not the slightest doubt that not only will it be on time, but also largely on budget," Mr Livingstone said.
"All these scare stories over 'costs doubling', we have held the costs for this first year and there's no reason we can't hold them for the next six."
He said rejuvenating parts of London had been the initial impetus for the London bid, but that the Athens Olympics in 2004 had showed how a major sporting event could have a positive effect on people's lifestyles.
Mr Blair praised the team who won the Games for London saying: "What they did was paint a picture of London with people of different backgrounds, faiths and creeds all sharing common values.
"That shows what the Olympics can do for the world."
Lord Coe said: "The Games will do great things for the quality of life in east London, sparking the biggest urban regeneration programme in over 100 years and bringing many thousands of new jobs.
"The economic benefits will spread throughout Britain."