London's Wembley Arena will house some of the events in the 2012 Olympics should the construction of a temporary venue near the Olympic Park work out as being too expensive.
The venue will be used for badminton and rhythmic gymnastics during the next Olympic Games.
Such a move will mean that a temporary £40m venue will not after all need to be built in Greenwich.
Organisers were previoulsy under pressure to house some events and to ensure athletes could train and stay near any venue, sticking to the "compete and not commute" slogan.
Denis Oswald, Chairman of the International Olympic Committee, revealed the agreement: "Proposals in that direction have been made by the London Organising Committee of the Olympic Games (Locog) to use Wembley: using an existing facility rather than building a temporary venue in the park."
He also came to London's support when it was suggested they had reneged on their promise for athletes to reduce travel time, saying that the global financial crisis had caused "exceptional circumstances".
"The two venues are exceptions and we should not forget that training facilities are all very close to the Village and athletes spend 90-95% of the time training rather than competing".
In fact, athletes would have hotel rooms within walking distance of Wembley, avoiding in this way travel to east London.
"If in two sports the athletes have to travel a little further than expected and can walk from a hotel to the venue I don't think it can be an issue," Oswald said.
Locog Chairman Sebastian Coe stated: "It's a combination of cost - everyone recognises the world has changed dramatically since when we bid - but it's also about legacy and athlete experience."
The London Mayor Boris Johnson thanked the two federations for understanding their concerns to save money wherever they can "in these tough economic circumstances".
He added: "I am confident that Sebastian Coe and his team will ensure that every athlete competing at Wembley in 2012 will not only have a great venue, but all the facilities they need, right on the doorstep, to help them go for gold."
The deal is not finished yet but it is expected to resolved in the coming few weeks.
Meanwhile, the Badminton World Federation will discuss the issue at its annual meeting in Bali this week.
(CL/BMcC)
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