Further funding from the £9.3 billion London 2012 Olympic budget has been allocated to support the building of the Olympic Village and media centres, the Government has announced.

The Games' overall £9.3 billion budget remains unchanged and the contingency remains sufficient to cover the remaining risks to the project.

A total of £394 million was agreed today from the Olympic Funders Group contingency, the part of the budget designed to guard against risks outside the control of the Olympic Delivery Authority (ODA). Separately, £67 million has been released from the ODA's programme contingency.

The use of part of the contingency funds contained in the budget - an additional £326 million towards the Olympic Village and £135 million towards the International Broadcast and Main Press Centres (IBC/MPC) - is needed to meet a shortfall in private sector funding as a result of the global economic downturn.

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Olympics Minister Tessa Jowell said: "The Village and media centres are absolutely essential to a successful London Games with a real lasting legacy. With private sector funding now much more difficult to secure because of the global economic downturn, it is right that we take steps to safeguard these projects.

"The extra funds we have allocated today come from existing contingency funds within the overall £9.3 billion budget. Lower than anticipated construction inflation and good progress across the project has reduced risks, meaning that the overall budget is unchanged and enough contingency funds remain. We are determined to deliver the games within budget."

The £326 million extra funding for the Olympic Village includes the £95 million announced last year and will allow works to continue whilst the ODA continues to negotiate with private developer Lend Lease, and the banks, regarding private investment for the Olympic Village.

Negotiations are also continuing with Registered Social Landlords (RSLs) in relation to the provision of affordable housing which also contributes to the funding of the overall project.

The Village will house up to 17,000 athletes during the Olympics and over 6,000 during the Paralympics. After the games about one third of the apartments will be available as affordable housing.

(JM/BMcC)