London can afford 2012 Olympics

London can afford to stage the 2012 Olympic Games, a new report says today.

Rating agency giant Standard & Poor's says while the capital's Olympic-related infrastructure spend will be $15.8 billion (£8.5 billion), of which $11.5 billion is transport, only $460 million is dependent on London winning the Olympic bid.

However, it warned that a successful bid would carry a "significant" political risk which could sour relations between Downing Street and the Mayor and affect the capital's credit standing.

The Greater London Authority, which has a top AA-plus credit rating, meaning it can borrow cheaply in financial markets, will have to find $1.2 billion. The report says: "A well-delivered Games could strengthen the GLA's powers."