Ministers handed over another sizeable chunk of contingency reserves to London 2012 organisers and put the entire £1.1bn Olympic village into public ownership after rejecting a proposed £375m debt-plus-equity contribution from a private developer.

Under the latest draw-down from the £2bn Olympic contingency fund, £324m has been handed over to the Olympic Delivery Authority, the body responsible for games construction, for funding the village, following a £326m sum handed over in January.