Flags were brandished, tickertape rained down, the Red Arrows flew past. The party could start

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The Independent Online

One agonising minute later, the word "London" passed the IOC president Jacques Rogge's lips and the crowd erupted into screams of jubilation.

Dame Kelly Holmes, who had stood on the specially erected stage shaking with nerves before the news came through, burst into tears and jumped up and down in delight before running to embrace Steve Cram.

Strangers clasped each other and danced around while British, English and Olympic flags were waved in triumph.

For some in the crowd, the announcement took time to sink in, with cheers rolling through the square like a Mexican wave as they realised London would be hosting the 2012 Olympics.

One female member of the bid team opened a bottle of champagne and poured it down the throats of everyone near by.

Tickertape rained down on the crowd and balloons flew up in the air as the atmosphere took on a carnival flavour.

Hours earlier, the people in the Square had seemed subdued and even resigned rather than hopeful. The organisers had insisted that this was a "thank you" party, win or not, for the city and all the people involved in the bid.

Hundreds of children had been given the day off school and bussed in for the midday carnival, featuring a host of performers and bands. Dame Kelly, Sharon Davies and Sally Gunnell were among the athletes trying to gee up the crowd before the announcement as the grey skies threatened rain and the voting drew closer.

"I'm so nervous, I feel like I'm standing on the track line," said Dame Kelly.

The appearance of the pop star Rachel Stevens buoyed the mood, particularly among a group of builders who suspended working to give their seal of approval. But a tent housing official London 2012 merchandise was deserted, reflecting the lack of confidence in the city's chances.

"It's too close to call," was the refrain from around the Square as the race came down to London and Paris after the first three rounds of voting.

Hundreds more people flooded into the Square and by the afternoon, more than 11,000 people were celebrating.

Revellers danced as the singer Heather Small sang "Proud", the backing track for London's presentation to the IOC, while a carnival band and team of drummers reflected the multicultural nature of the British bid.

The party had been due to finish at 2pm but, hours later, people were still celebrating.

Copies of the London Evening Standard, bearing the headline "We've Won!", sold out as soon as they arrived at stands as people sought them as collectors' items. The 2012 merchandise tent was engulfed with shoppers queuing up to buy T-shirts, bags and anything else they could lay their hands on.

Marc Roche, a French journalist with Le Monde, said: "I am extremely disappointed, but that's how it is. Mr Blair will have a good Gleneagles whereas Mr Chirac will not." He added: "You also have another seven years to improve your cooking."

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