Allegations of black market touting by foreign Olympic committees could see thousands of tickets cancelled, but an inquiry into the scandal may not be completed before the Games begin.
Claims that seats for high-profile events – including the 100m final – have been sold for up to £6,000 after being siphoned off from foreign Olympic committees caused anger when they emerged yesterday.
Former Liberal Democrat leader and Olympic sprinter Sir Menzies Campbell branded it a "thorough disgrace".
The claims, published by The Sunday Times, are being investigated by the International Olympic Committee ethics commission, headed by Pâquerette Girard Zappelli. But any investigation is now unlikely to be completed before the Opening Ceremony in 39 days' time.
The scandal allegedly involves more than a quarter of the 204 countries represented at the London Games and thousands of tickets. "We could just cancel all the tickets from which you could establish they were being sold at greater than face value. That's what happens at rock concerts," said Sir Menzies, who sits on the Games board.
He added: "For the next Games we could halve the ticket allocations for countries that offended this time. If athletes break the rules, they get punished. It is particularly galling as there are lots of people who haven't got tickets in this country."
His fellow board member and shadow Olympics minister, Tessa Jowell, added: "This was the responsibility of the IOC. They now need to decide what to do next, whether that's recalling the tickets or something else. It must be a decision that inspires public confidence."
Official overseas ticket supplies are held by national Olympic committees (NOCs) within member countries. They are forbidden to sell their tickets abroad or to anyone who plans to resell them.
Around 1.1 million tickets out of the 8.8 million available have been allocated to NOCs for the London Games. But officials and agents representing 54 countries were willing to breach rules on selling them, The Sunday Times said.
Journalists posing as envoys of a Middle Eastern ticket tout reportedly found 27 officials and agents willing to do business. One, from Serbia, allegedly offered 1,500 tickets for £80,000. China's official ticket agency reportedly agreed to sell the best seats in the stadiums for up to £6,000 each.
Locog (the London Organising Committee) said rules on selling tickets to the Games among international fans were "clear and unambiguous".
It said NOCs and their authorised ticket sellers signed contracts with Locog agreeing terms and conditions.
A Locog spokeswoman would not confirm whether the tickets would be returned to the British public or set a timescale for the IOC investigation.
An IOC statement said: "The IOC takes these allegations very seriously and has taken the first steps to investigate. Should any irregularities be proven, the organisation will deal with those involved in an appropriate manner."
Among other claims, The Sunday Times alleged that Spyros Capralos, the Greek Olympic Committee president, said he had "pulled strings" with Lord Coe, chairman of Locog, to give Greece more tickets on the basis that demand in the country outstripped expectations. The newspaper claimed Mr Capralos admitted demand had been very low in reality and that tickets were sold on to people for profit.
But Locog issued a swift denial of the claims yesterday.
"With regard to boasts by the Greek Olympic Committee (HOC) that discussions on tickets took place with Sebastian Coe, we can confirm this is untrue," a Locog statement said.
It said: "Seb received a letter from the HOC and responded saying that tickets had been allocated in accordance with the IOC's ticketing policy.
"There was no further contact either formal or informal on this subject."
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