London mayor Boris Johnson has admitted West Ham will "almost certainly" win the right to rent the Olympic Stadium after a deal for the club to buy the venue collapsed.
The decision to pull the plug on selling the stadium to the Hammers has been branded "a catastrophe", with London 2012 chairman Sebastian Coe blamed for insisting on the running track being retained. The Government insist, however, that the track will be "non-negotiable" in the new tender process, which will see up to £95million of public money now spent on the stadium.
Johnson insisted the taxpayer would not carry the can, saying: "I think we have come up with a very good solution. We will keep it in public hands but we will effectively rent it to a football club, almost certainly West Ham, and that will cover the costs and I think it will be a very good deal for the taxpayer."
Olympics minister Hugh Robertson confirmed there is a funding gap of up to £60million needed to transform the venue before it can be leased out.
The collapsed deal would have seen the £95million transformation cost split with £35million from the Olympics budget, Â£20million from West Ham and £40million from Newham Council. If similar changes are to be made then only the £35million is guaranteed and a gap of £60million will have to be filled.
Robertson said the Government pulled the plug on the West Ham deal due to "legal paralysis" caused by court action brought by Tottenham and Leyton Orient. The biggest issue concerned an anonymous complaint to the European Commission that the £40million from Newham was effectively state aid and therefore broke competition rules.
The move should now remove uncertainty over the stadium ahead of London's bid for the 2017 world athletics championships.
It was however condemned by Andrew Boff, Olympic spokesman for the Conservative Group on the London Assembly.
Boff said: "This catastrophe is entirely down to Sebastian Coe's insistence that the stadium should retain an athletics track after the Olympics.
"Coe's masterplan has turned the Olympic legacy into the Millennium Dome Mark II but with a financial climate that gives it a less positive future."