The cost of delivering the London 2012 Olympics will rise significantly beyond the original budget of 2.38 billion pounds (US$4.49 billion), the acting chairman of the Olympic Delivery Authority (ODA) said on Wednesday.

Roy McNulty would not speculate on a figure but said non-venue factors would push the budget up.

"VAT, security costs and regeneration costs are going to be significantly higher than allowed for before, as well as our desire to have a contingency for such a major project," McNulty told the London Assembly.

McNulty and ODA chief executive David Higgins were called to answer questions at an extraordinary meeting of the London Assembly following stinging criticism of the project by Jack Lemley who resigned as ODA chairman last month.

American Lemley told the Idaho Statesman that the slow progress of the project and concerns over budgets were behind his decision.

"I want to build things, not to sit around and talk about it. So I felt it better to leave the post and come home," the 71-year-old was quoted as saying.

While admitting that the final figure for the Games would be significantly higher, McNulty said it was "not elastic" and that the unspecified contingency fund would cover it.

Addressing the Assembly, London Mayor Ken Livingstone said he would only be prepared to accept an additional fund equal to around 20 percent and would veto any demand from the Treasury for a 60 percent contingency fund.

"That would be breathtakingly ridiculous," he said, adding that it would give developers a "green light to screw up" the construction project.

'RAISED CONCERNS'

Quizzed on the reasons for Lemley's departure, McNulty said there had been clashes.

"I don't agree with Jack's analysis, but people shouldn't confuse Jack's departure with things he has said since.

"Jack found it frustrating that we operate in an environment with multiple stakeholders and he was also frustrated that we are not in possession of all the land for the Olympic Park.

"Jack raised concerns that we weren't doing enough on the ground during the summer. But the programme did not require us to be digging holes in the ground."

Despite Lemley's resignation and concerns about the post-Games use of the Olympic stadium, Higgins assured the Assembly that the project was "hitting all its major milestones and is on course".

On the future of the Olympic Stadium, Higgins repeated that it would be re-configured from an 80,000-seater to a 25,000-seater with an athletics track retained.

Although not ruling out a football club moving in to the stadium Higgins said it was unlikely any club would pay the 100 millions pounds needed to raise the capacity to a level suitable for a big Premier League club like West Ham United.

"We held discussions with West Ham, although we haven't heard from them for around two months," he said.

"But the option for a football club to work in a 25,000-seater is still a possibility."

Lemley declined an invitation by chairman Brian Coleman to express his concerns to the London Assembly