2012 costs may jeopardise other infrastructure work

Major infrastructure projects in London could struggle to find funding as the government wrestles with the cost of the 2012 Olympics, politicians have warned.

Speaking on behalf of London mayor Boris Johnson, MP Bob Neill expressed fears the government would let its commitment to Crossrail slide to fund the £9.3bn Games.

Neill said: "With the Olympics the competition for funding for major infrastructure projects is tough.

"It is important we all make a strong case for investment in London and make sure the pressure of the Olympics doesn't cause a back-slide on Crossrail."

Construction Confederation chief executive Stephen Ratcliffe dismissed the claims. He said: "I don't believe that is the case because the size of the Olympics project in relation to other public sector projects is tiny."

Sources said contractors were concerned about how the economic downturn might affect government spending, but most had public sector projects on their books until 2010.

Neill was speaking at the launch of recommendations to prevent climate change by the Institution of Civil Engineers and the Institution of Mechanical Engineers.

The groups said the industry was stretched by a shortage of engineers, with 2,800 new engineers needed each year until 2012 to address London demand alone, but only 1,000 graduating each year.