The estimated cost of building sports facilities for the 2012 London Olympics has soared by about 40 percent, the British government said on Tuesday.

Sports minister Tessa Jowell blamed higher steel prices and transport costs for the rise to 3.3 billion pounds (US$6.26 billion) in the official estimate of the cost of building the Olympic Park, the main complex for the London Games.

This stands 900 million pounds higher than the estimate given in London's original. Some newspaper reports have said the games could spiral to 10 billion pounds.

The British media has voiced increasing concern over the escalating cost of the London Olympics after Jack Lemley resigned last month as chairman of the body responsible for creating the event’s infrastructure.

Lemley told a US newspaper that slow progress and budget concerns were behind his decision.

Britain has a history of delays and cost overruns for major projects such as the Millennium Dome, the now farcical center-piece of Britain's millennial celebrations, and Wembley stadium.

Jowell insisted the project was under control and said International Olympic Committee chief Jacques Rogge had told her on Friday that the IOC had "full confidence in the good progress of the works".

IOC officials claimed London was two years ahead of where Sydney was at an equivalent point of its preparations for the 2000 Olympics and three years ahead of Athens, which held the Games in 2004, she said.

The new estimate for the Olympic Park includes a 400 million pound fee that will be paid to consultants responsible for ensuring costs come in on budget, Jowell told a parliamentary committee.

Jowell said discussions were taking place within the government on how to meet the increased costs. An earlier agreement had said overspending would be financed by London taxpayers and from national lottery profits.

The 3.3 billion pounds is only part of the total costs of Britain's Olympic plans.

The original estimate did not include value added tax (VAT), standing at 17.5 percent, and the money set aside for security in the original budget was inadequate, Jowell said.

London won the right to stage the 2012 Olympics a day before four British Islamist suicide bombers killed 52 people on the London transport system on July 7 last year. The capital's police chief had said the 2012 Olympics will be a "huge target" for terrorists.

Jowell said she could not put a figure on security costs as discussions between government and police were ongoing.

Government officials are also discussing creating a contingency fund for the budget, over and above those contingency amounts already provided for.

The figures also do not include the cost of a huge urban regeneration scheme in east London that the Olympics is intended to kick-start, including the building of about 40,000 homes.

Icelandic FA president Eggert Magnusson, whose takeover bid for English soccer club West Ham United was accepted on Tuesday, said the club could move into London's Olympic stadium after the 2012 Games. However, Jowell said West Ham had not contacted the government on the issue.

(China Daily November 23, 2006)