That's according to a report by accountants KPMG on behalf of the Department for Culture, Media and Sport.
The Observer newspaper says the government has appointed consultancy KPMG to begin a reappraisal of its Olympic costs. These are said to have surged because original projections allowed for inflation at three per cent.
However, inflation in the construction sector is now reported to be more than seven per cent, as the price of raw materials, particularly oil and steel, has soared.
Wages in the sector are expected to rise substantially as London prepares itself for a building boom.
However, the Sunday Express newspaper reports that the Games will deliver a £9billion boost to the UK economy over the next six years. That's according to a CB Richard Ellis report to be presented to ministers this week.
The report predicts 15,000 jobs will be created in construction and thousands more in other sectors, such as IT and tourism.
