The cost of the London 2012 Olympics has more than trebled to £9.3bn, the government admitted on Thursday, prompting the Conservatives to accuse Gordon Brown of “massive financial incompetence”.

The revised budget is almost four times the original estimate of £2.4bn of public funding set when London’s bid succeeded less than two years ago.

A new £2.7bn contingency fund for cost overruns, more than £800m in value added tax and £900m in increased construction and management costs were among
the increases announced by Tessa Jowell, the culture secretary.

The Conservatives argued that the bulk of the new costs – the contingency and VAT provisions – were “perfectly predictable at the time of the bid”. The Liberal Democrats said the scale and speed of the cost rises called into question “the government’s ability to provide the proper management” for the event.

But Ms Jowell hit back, accusing opponents of disloyalty and repeatedly branding criticisms as a “vote for Paris”, in reference to the UK’s victory over the French capital in the fight to stage the games. She shrugged off concerns that the budget increase was a harbinger of more cost rises to come, saying the announcement “means it’s full steam ahead for 2012”.

The deal will put further pressure on this summer’s already tight spending round. Taxpayers will underwrite £5.9bn of the new budget, although £2.7bn of this relates to the contingency fund, which ministers hope will act as a safety net, rather than an open cheque for builders.

Ms Jowell told MPs it was “prudent” for the government, as a funder of last resort to the games, to have a central contingency, on top of the 23 per cent allowance already built into budgets for the individual venues. Ministers have allocated £500m from the £2.7bn contingency to the Olympic Delivery Authority, which is overseeing the construction of the site, and will hold the remainder “under very tight conditions”, Ms Jowell said.

An extra £675m will be taken from the National Lottery after 2009, taking its total contribution to £2.2bn. The transfer of money from other causes to the Olympics will have to be approved in a vote by MPs and peers.

Ms Jowell told MPs she had agreed with Ken Livingstone, London’s mayor, to negotiate a deal to share any windfall profits from the sale of redeveloped land in Stratford between the Lottery charities and London.

London will have to fund an extra £300m. But Ms Jowell said it would not be necessary to increase the £625m contribution from the capital’s council taxpayers or raise transport fares.

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