London 2012, Vancouver 2010 share similar financial woes

Next week the Olympic circus pitches camp in the capital for a four-day conference attended by International Olympic Committee president Jacques Rogge and 400 other delegates gathered to distil the lessons of the Beijing Games for future host cities. For London the most significant event comes last, a one-day review by senior IOC executives of the city's progress. It promises to be a chastening affair, with cold economic realities dominating the agenda.

Politically and practically, the ground has shifted since the IOC inspectors were last in town in June, a visit that concluded with Denis Oswald, chairman of the co-ordination commission, cheerily awarding the capital "9.75 out of 10".

In the interim, London has been hit hard by the banking crisis. The deep-freeze afflicting the financial markets has been disastrous for London's plans for a privately financed Olympic village and media centre. It now seems likely that most of the £1 billion emergency contingency will be required to bail out the projects. The contingency had been ear-marked to cover increases in security costs and should it be wiped out to cover construction, Tessa Jowell's promise that the £9.3 billion budget will not be exceeded could be in danger.