The Telegraph reported that Tessa Jowell told leisure industry bosses: "Had we known what we know now, would we have bid for the Olympics? Almost certainly not."

The budget for the Games has exceeded initial estimates, combined with the pressures of recession squeezing both private contractors and Government finances.

However, Ms Jowell later played down her comments.

She said: "My comments should be seen in the context in which they were made.

"I have often observed that we bid for 2012 in one economic climate and are now in another.

"Had the scale of the downturn been anticipated, I am sure there would have been a view from some that this would not be the time to commit significant public expenditure to a project like the Olympics.

"But as I made clear in my speech, the reality is very different. This is precisely the time for this investment to be made. It has the potential to be economic gold at a time of economic need.

"It will regenerate one of the most deprived parts of east London and is already creating billions of pounds worth of work for British companies and jobs for thousands."