Taxpayer to foot bill as Olympic stadium deal collapses

The Government has called an abrupt halt to negotiations to install West Ham United as the owner of the Olympic Stadium after the 2012 Games. Instead the stadium will be kept in public ownership and leased to a number of tenants – probably including West Ham – in a decision that could require an extra £60m of public funding on top of the £500m spent on its construction.

Hugh Robertson, the minister for Sport and the Olympics, said that the judicial review sought by Tottenham Hotspur and Leyton Orient against the decision to award the stadium to West Ham had been further complicated by an anonymous appeal to the European Commission. That was "the straw that broke the camel's back". The review was due to be heard next week.

Mr Robertson said: "We had a process that was mired in judicial wrangling. This could have gone on for months, if not years. To stop this legal paralysis and to bring some certainty we decided overnight to suspend it."

The Olympic Park Legacy Company will now restart the bidding process with the aim of having tenants secured by January. That would allow them to meet the March deadline to have a planning application in place to have the stadium ready for its new use in 2014.

London is bidding to host the 2017 World Athletic Championships and has given assurances to the IAAF, the sports' governing body, over the future of the stadium.

West Ham are almost certain to still move into the stadium – and could buy it in the long term. They are likely to have to pay rent of £2m towards a predicted annual running cost of £5m.

The remainder of the Stratford running costs will be met by hosting concerts, athletics and other sporting events.