Independent on Sunday exclusive:

Exclusive: May 'was told 10 months ago of G4S failings'

Police watchdog raised issues over security firm, concerns echoed by ExCeL Games venue

Theresa May was last night under pressure to explain whether she could have averted the Olympics security fiasco as it emerged that the Home Office was warned 10 months ago that there were problems with the ability of G4S to provide security for the Games.

A confidential report by Her Majesty's Inspectorate of Constabulary was presented to Home Office ministers in September 2011, which should have raised alarm bells about the readiness of G4S.

The report by the police watchdog into Olympics security preparedness – which has never been published – raised serious issues over G4S last year, The Independent on Sunday understands. It is not known whether the Home Secretary personally saw the report or whether it only went across the desk of James Brokenshire, her junior minister. But given Mrs May's ultimate responsibility for policing and security during London 2012, she will be under pressure to explain why the crisis came to a head little more than two weeks before the opening ceremony.

The Home Secretary told the Commons last Thursday that the shortfall in guards which G4S could provide became clear only the day before, when the Government announced it was deploying 3,500 troops to cover the shortage.

In her statement, Mrs May said: "We were receiving reassurances from G4S until very recently, and the absolute gap in numbers was crystallised finally only yesterday."

Opponents point out the Home Secretary's careful choice of words could mean she was aware some time ago there was a general shortfall – raising questions over why it was left so late in the day to act.

In another development, ExCeL, the largest competition venue at the Games, last night revealed it had been raising concerns with Locog, the London 2012 organisers, about the handling of security by G4S for several months.

Lord King, the former Conservative defence secretary and a director of the ExCeL exhibition centre in east London, said that doubts about G4S's security plans had been "an ongoing saga for some time".

Last night, former Scotland Yard Assistant Commissioner Tarique Ghaffur, who headed security planning for the Olympics, said the problems were "predictable". "I just couldn't understand, when I was planning for it, how you could give such a contract to one company. Venues like Wembley already have their own security, and it is just logical to give it to those who are doing it day in and day out." He said he also fought against the responsibility for operational planning going to the Home Office. "I was pushing for it to be kept in the Met. They already plan 3,000 to 4,000 events a year."

As the row over Olympics security escalated, the IoS can also reveal:

* An insider said the root cause of the problem with G4S was its internal computer system which had failed to calculate staff rostering.

* David Cameron will convene a regular Olympics Cabinet from tomorrow to run throughout the Games, acting as the Government's crisis committee. London's mayor, Boris Johnson, will also attend.

* G4S won the security contract with Locog after submitting a tender at least 25 per cent lower than any other, which would have been hugely attractive to a British Olympic movement paranoid about going over budget.

* Hundreds of British soldiers face being stuck in Afghanistan for weeks longer than planned because of the knock-on effect of delays to training and holidays. One senior army source said bomb-disposal personnel were most at risk.

Nick Buckles, the G4S chief executive, apologised directly to troops yesterday as he revealed that the firm faces a penalty of up to £20m for failing to deliver on its £284m contract, as well as paying the Ministry of Defence for providing the troops, meaning the total loss will be up to £50m.

Three months after the critical HMIC report was handed to the Home Office last September, G4S's contract to provide 2,000 staff increased to 10,400 personnel. It is not known whether the December increase was as a direct result of the police report, but 2012 insiders said that the leap in numbers should have forced the Home Secretary to keep a closer eye on G4S.

A senior source involved in organising the Games said concerns were circulating before the report was published. "For 18 months, there has been a worry about there being enough people," he said. "I am surprised that senior people at the Home Office didn't ask these questions."

Mr Buckles, who faces a grilling by the Home Affairs Committee on Tuesday, said that he had realised only "eight or nine days ago" that there would be a shortfall. But he insisted the company had kept both the Government and Locog fully informed about what was going on.

Managers at ExCeL, which will stage boxing, fencing, judo, taekwondo, table tennis, weightlifting and wrestling, were stunned when G4S told them the in-house security staff would be "stood down" for the duration of the Games, to be replaced by inexperienced new recruits.

"We managed to get sense on that," Lord King said. "We have been anxious to establish what the situation is, anxious to know who was going to be handling security. It has been an ongoing saga for some time."

Lord King added that new personnel numbers had to allow for G4S staff and troops getting caught in Tube and road queues expected across the capital. "Whatever numbers the Army puts in, I hope that includes a safety margin to plug the gaps."

Company file

* Founded in Copenhagen in 1901, G4S, based in Crawley, now employs 657,000, making it the world's third largest private sector employer behind Walmart and Foxconn.

* Turnover last year was up 4 per cent to £7.5bn. The Olympics fiasco has wiped £140m off its value.

* It provides security at 14 UK airports and four ports. It also runs six prisons, four children's homes and two immigration centres, and tags 14,000 offenders. It is responsible for security at 500 police stations and 30 custody suites.

* It makes 640,000 private ambulance journeys each year, delivers £300bn in cash in a fleet of 2,300 vehicles and takes 39 million meter readings for utility companies in the UK.

* In December, it paid £17m for Chubb Emergency Response, a key holding and mobile patrol business that covers 22,000 sites.

* It provides security for Wimbledon, golf's Open championship and all the party conferences, but lost a European Parliament contract.

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