Culture secretary Tessa Jowell has admitted that the Olympic stadia will now cost £3.3 billion to build - a 38 per cent increase on the original £2.37 billion stated when London won the games last July.
But the revised budget does not take in the extra cash needed for new security and contingency costs - which could add hundreds of millions of pound to the final bill.
Addressing the Culture, Media and Sport select committee this morning (21 November), Jowell blamed the hike on soaring building costs, including the doubling of steel prices.
The minister insisted the project was 'under control' but refused to rule out London Council tax payers funding the cost overrun.
'Six years out it's very foolish to rule anything in or anything out,' Jowell told the committee.
Taxpayers were warned in October there was no cap on the amount they could end up paying if the games go over budget.
Last month the Olympic Development Agency (ODA) admitted it faced a £1 billion VAT bill that had not been factored into original cost forecasts.
The London Assembly is seeking an 'unequivocal guarantee' from Prime Minister Tony Blair that Londoners won't pay more than the £625 million pounds already set aside to fund 2012.