2012 Olympic Village to be publicly funded

By Martyn Herman

LONDON (Reuters) - The British government injected 324 million pounds ($491.5 million) into the athletes village for the 2012 Olympics on Wednesday, meaning the entire cost of the one billion pound project will be met by public funds.

Originally, the 2,800-apartment village in east London was to be a private venture by developer Lend Lease but the global credit crunch meant investment dried up and the government has opted to fund it itself.

Private investment for the construction of the International Broadcast Centre and Media Centre also failed to materialise meaning they will also be met by public funds.

"After careful assessment it is clear that investing in the Olympic village now will save public money in the long term," Olympics Minister Tessa Jowell said.

"A private deal was available, but because of the credit crunch it was not a good deal. By funding the entire project the village will become publicly owned and the public purse will receive substantial returns from sales."

The 324 million pounds announced on Wednesday in a quarterly update on the Olympic budget, comes on top of the 326 million pounds of contingency released for the village in January.

The Department of Culture Media and Sport (DCMS) said 63 million pounds of the 324 million came from savings elsewhere.

In addition, the DCMS said on Wednesday that a further 268 million pounds would be invested in the village via a grant from the Homes and Communities Agency (HCA) following a pre-sale agreement for affordable housing.