Olympic Village funding unlikely to be agreed till after construction starts

Funding for the £1bn Olympic Village looks unlikely to be agreed until 2009, by which time construction work will have started.

The government had hoped to reach agreement with backer Lend Lease before Christmas, but admitted today that negotiations will go on into the new year.

The funding problems surrounding the village and the Olympic media centre were the focus of a meeting of the 2012 Funders Group, chaired by chancellor Alistair Darling.

Also attending were chief secretary to the treasury Yvette Cooper, Olympics minister Tessa Jowell, culture secretary Tessa Jowell, transport secretary Geoff Hoon, and London Mayor Boris Johnson.

The Olympic Delivery Authority (ODA) has already announced £95m in contingency funds to allow construction work to start on the Olympic Village to schedule.

Jowell said: "The Ministerial 2012 Funders Group today approved the continuation of negotiations with private sector partners, including Lend Lease, banks and Registered Social Landlords to fund the construction of the Olympic Village.

"Due to the current situation in the credit and housing markets it is now likely that these negotiations will run into next year.

"Our priorities are to secure value for public money, the village delivered on time and a long-term asset that will provide up to 3,000 homes, with a return for the taxpayer.

"In the meantime £95m has been identified within the £9.3 billion budget to enable work to continue on the village so that it is delivered on time."