London Games offered £225m loan

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Organisers of the London 2012 Games have had a £225m loan from the public sector approved, which could go towards helping to build the Olympic Village.

The Olympic Delivery Authority (ODA) said it has yet to decide if it will accept the public sector European Investment Bank's offer.

The government had hoped the private sector would raise the £1bn needed for the village's construction.

The ODA has said the recession has made raising private finance difficult.

In September it said it had secured only half of the money needed for the athletes' village and media centre in Stratford, east London.

We have said that the European Investment Bank could be a funding source for the affordable housing ODA spokesman

Athletes will stay in the 3,000-home Olympic Village - the biggest component of the 500-acre Olympic Park - which is being built by Australian firm Lend Lease.

A spokesman for the ODA said: "As we have made clear in recent months, discussions on potential funding of the Olympic Village involve both affordable housing and private sector development.

"We have said that the European Investment Bank could be a funding source for the affordable housing.

"Alongside this, discussions are continuing with Lend Lease over the wider Olympic Village development.

"We expect talks to have concluded this summer."

'Harsh terms'

In September ODA chairman John Armitt said it had originally expected to already have "quite big sums of private sector funding" for the village and media centre.

"The consequence of what is happening in the markets means that the availability of funding is more difficult," he said.

"That is not to say that it is not available but, if it is available, it is available on harsh terms."

After the Games the village will become part of the overall Stratford City regeneration scheme, which will include a shopping centre and up to 3,300 new homes.

The original budget for the 2012 Olympics was £3.4bn but this was increased to £9.3bn last year.

The European Investment Bank is the long-term lending arm of the European Union.