Olympics 'may take decade to repay'

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Sales from increased land values at the east London site, estimated at £1.8 billion, are vital to help repay the extra £675 million which will be diverted from the lottery good causes from 2009. This is in addition to the £410 million National Lottery funding already promised.

Olympics Minister Tessa Jowell told the Culture, Media and Sport Committee: "The decision about when the land is sold will be on the basis of selling the land in the most favourable circumstances.

"We would certainly expect that the LDA (London Development Agency) would start selling the land after 2012, but the period of selling the land may be up to 10 years."

The first bill to be settled will be £650 million to the LDA for the money it spent buying the land at the Olympic site.

Sale proceeds will then be broken down into two phases with profits split 75% to 25% initially between the lottery and LDA respectively as the total potential profits are currently unknown. The second phase will see the LDA get a 75% share and the lottery receiving 25%.

In the first phase the lottery gets £506 million and the LDA, which aims to regenerate London's East End, gets £125 million. In the second pay-out, the lottery gets £169 million and the LDA gets £375 million.

The lottery is not a "supplicant" in this arrangement, according to Ms Jowell.

"Everybody would want the lottery to get its money back as quickly as possible but these are decisions that have to be taken relative to the land values at the time," she said.

"At this stage what I would not be prepared to do is to predict with any certainty that the land sales will exceed the £1.8 billion we have predicted."