THE budget for the 2012 Olympics looks set to escalate again, claim Conservatives on the London Assembly.
The warning comes it was revealed that VAT must be applied to all building and staging costs, despite not being included in the initial budget.
The Treasury said that VAT must be paid to avoid breaking EU legislation.
This could add another £500 million to the estimated £2.4 billion to the cost of the east London Olympic development site, the Tories say.
Bob Blackman, Brent and Harrow member of the London Assembly and Conservative spokesman on the Olympics said: "Why wasn't the VAT element factored into the original budget?
"Was it done as a cynical attempt to understate the REAL cost of construction?
"Or was there a lack of communication between the Treasury and those who constructed the initial budget?
"Whichever, ... we need urgent assurances that London's taxpayers will not be liable for any of these additional costs.
"A cap on the Olympic council tax precept would have provided some guarantee for London."
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