Tessa Jowell today contradicted Ken Livingstone's claim that the original Olympics budget was "a con".

Her office denied the Mayor's allegation that the £4 billion costings were deliberately pitched low.

Mr Livingstone told an election meeting this week that he and Ms Jowell, who is also his election campaign manager, "ensnared" the Government into backing the 2012 Games with a bogus figure he knew would rise. Last night he repeated the claim on the BBC's Question Time and boasted that the ruse had won billions of pounds in investment for the East End.

"I decided to bid for the Olympics not because of three weeks of sport but because I knew it was the only way of getting any government, Labour or Conservative, after 30 years of neglect, to invest billions of ponds in rebuilding the East End - and it worked a treat," he said.

Presenter David Dimbleby exclaimed: "You make it sound like a con trick." Mr Livingstone responded: "It was! Literally, absolutely!"

This week a watchdog group of MPs criticised the Olympics budget, which has now risen to £9 billion.

The public accounts committee said the earlier budget was "entirely unreasonable" and accused ministers of "wishful thinking".

But a spokesman for Ms Jowell said: "We put the budget together with the best information possible and the best expert advice that we could get."

Asked if there had been any kind of con, the spokesman retorted: "Absolutely not. Ms Jowell always said that the budget would have to be revisited once we won the Games."

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