The Government has agreed to a £135m bailout of the media centre that will house journalists covering the 2012 Olympic Games in London.
The £355m facility, which will be used by an estimated 20,000 journalists during the ceremony, was originally expected to be part-funded by the private sector.
But its construction costs will now be met entirely from the Olympic budget, after the credit crunch thwarted attempts to secure private investment.
The contingency payment for the media centre is part of a wider £460m package announced by the Department for Culture Media and Sport last night in a bid to keep building work on track during the looming recession.
Olympics minister Tessa Jowell said: “The media centre [is] 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 [this project].”
But the Liberal Democrats’ spokesman for the Olympics, Tom Brake, said there was a risk that the facility would become a ‘huge white elephant’– and said it was time for the plans to be scaled back.
“The legacy plans aren’t there to justify an all-singing, all-dancing media centre,’he said.
“It is time to cut the Olympic cloth and settle for a scaled-down media centre.”
There are plans for the centre, which is being built in Hackney Wick on the edge of the Olympic site, to be transformed into a major, permanent ‘media hub’once the Games are over.
ITV is reported to have expressed a tentative interest in taking space in the complex. The mayor of Hackney, Jules Pipe, said creating a permanent media centre in the borough would create jobs.
“Today’s news is a big step in the right direction towards providing a meaningful and lasting employment legacy for local people,” Pipe said.
‘The media centres represent the single most significant opportunity for an economic legacy for east London from the Games.
“Leading media companies have expressed strong interest in moving to the centres in legacy, and the council will continue to use every available opportunity to work with Olympic decision-makers to secure this outcome for Hackney.”