London the Olympic city

At the heart of London's bid to stage the 2012 Olympic Games is the much-needed regeneration of whole swathes of the East End.

The bid will centre on a new Olympic stadium and village in Stratford - but its effects will be widespread and it is likely to provide at least 3,000 new jobs and 4,000 new homes for some of the capital's most deprived areas.

The Olympic village would probably be built in Hackney - and it is hoped the development could later be converted, for a small extra investment, into low-cost housing.

Meanwhile, neighbouring Newham council would benefit from the new stadium, which would probably be constructed on a "brownfield" former industrial site.

Council leaders in Tower Hamlets and Waltham Forest also hope to take advantage of the influx of tourism attracted by the Games, if London wins the international bidding war.

Andrew Mawson, who has pioneered regeneration schemes across the capital, urged that action was urgently required to protect the future prospects of east London's communities. He insists that the plans need to be extended to incorporate a string of developments already under way in the area.

Mr Mawson said today: "To succeed at staging an Olympic bid that does not follow in the footsteps of the Dome, the Government needs to understand that these things work best when you look at what is already happening in the area.

"The needs of the residents must be taken into account. The Olympics could be one of the most important triggers for further developments and it would be a big mistake for the Government to overlook this opportunity."

Key to the success of the project is transport infrastructure. Mayor Ken Livingstone is understood to be seeking funding for Tube extensions to help ferry hundreds of thousands of spectators to venues around the capital.

The biggest benefit could be the official go-ahead for Crossrail - the £15 billion rail link from Paddington in the west to Liverpool Street (and possibly beyond) in the east. Transport Secretary Alistair Darling is still unwilling to commit the Government wholeheartedly to Crossrail, which would connect existing mainline services and which Labour MPs in the East End are crying out for.

The British Olympic Association is worried that the two projects - Crossrail and the Games - would become too closely linked and have insisted that their bid can go ahead without Crossrail, which is unlikely to be completed before 2011.

But Liberal Democrat mayoral candidate Simon Hughes said: "The Government are living in cloud-cuckoo land if they think an Olympic bid stacks up without Crossrail."