London's 2012 Olympic bid leader Barbara Cassani is celebrating the news that the capital has advanced to next year's final round of voting.
London joined European rivals Paris, Moscow and Madrid and US city New York on the final list to be considered by the International Olympic Committee.
"We are thrilled to have made the shortlist but our hearts go out to the losing bids," said Cassani.
"This is just the turning point and now we must redouble our efforts."
Prime Minister Tony Blair said: "I am not surprised we have cleared this important first hurdle.
"The government will continue to do all we can to bring the Games back to the UK.
"It would be good for London and the UK and I am confident we have the vision, the venues and the passion to deliver a great event."
London 2012 deputy chairman Sebastian Coe said the focus would now be on delivering the best possible bid.
"The next year and a quarter will be all about hard work," said the former Olympic 1500m champion.
"All the other countries left in the bid are heavyweights so we will have to focus.
"I think London is in a very, very strong position. But the technical bid has to be flawless.
"You have to remember we are still in the foothills of the competition."
Five-time Olympic gold medallist Sir Steve Redgrave is also using his experience as a competitor to help London's bid.
The rowing legend is confident that London can successfully host the Games even though major investment in new venues and facilities is needed.
"We are trying to make it the most athlete-friendly Games there has ever been," said Redgrave.
"We have many areas to develop but ultimately that will have long-term benefits for the capital and the country in general."
One concern for London was that it scored low marks with the IOC for public opinion about the bid.
There has been some criticism that putting London forward for a British Olympic bid would alienate the rest of the nation.
But Paralympic judo star Simon Jackson said: "We need to get behind London because it is not far to travel to see world-class sport.
"The 2002 Commonwealth Games in Manchester helped the cause and proved we can stage a world event and do it well."
Marathon world record holder Paula Radcliffe added: "Britain has shown that we can successfully host major championships and Games and the IOC have obviously recognised this.
"The possibility of having an Olympic Games in your own country is inspiring to every sports person and hopefully this will have a positive effect on today's youth."