Today's Observer reports that a leaked letter from a senior civil servant to Ken Livingstone pledges £1 billion of government money that ministers had not previously revealed, whilst "London 2012 sources admit privately that some of the costs of staging the world's biggest sporting event were deliberately under-estimated or disguised during the bid process."

Opponents of the Olympic bid warned that the finances of hosting the Games in London were pure fantasy, but few can have expected the lies that were told to have started to unravel so quickly.

Organisers of the NoLondon2012 campaign will shortly launch a new website, London Olympic Watch, that will chronicle what east London campaigners fear will be a re-run of last year's financially disastrous Athens Olympics.

A PDF of the Observer article can be downloaded here