In a surprise move, culture and Olympics minister Tessa Jowell has ordered the Iraqi-born architect to redesign the pool project in a bid to keep the cost of the games from spiralling out of control.
According to Jowell, 'changes in specification' have resulted in a huge price hike, a state of affairs the labour MP branded 'simply unacceptable'.
The 20,000-seater swimming pool is the only Olympic scheme to have been officially unveiled to date and Jowell's decision will be seen as a clear statement of intent.
She said: 'In our bid to the International Olympic Committee we pledged that the Centre would cost £75million and that is precisely what it will do, with appropriate allowance for inflation.
'Of course I cannot give anyone a complete assurance that costs for the 2012 Games will not rise. But what I will do is be absolutely ruthless in ensuring that any potential overspend, no matter how small, is caught early and driven back down wherever possible.'
Exact details about why the centre's budget has ballooned remain sketchy and no clues are being offered by either Hadid or project collaborators S & P Architects, who have both been gagged by the government.
However, an unnamed government source has shed some light on the decision in an interview with AJ's stablemate Construction News. They said: 'A serious potential increase in costs has been reported to us by the London Development Agency and Sport England.
'The cost overruns were not down to any one factor and we don't want to go into specifics. This is not a slight on the architect at all - the issue is simply one of price.
'Obviously the more gold-plated a building is, the more expensive it will be, so we need to take action.'