Staging the 2012 Olympics in London will cost about 500 million pounds ($1.05 billion Cdn) more than stated in the original bid, the government said Tuesday.

That has boosted the estimated cost to two billion pounds (about $4.2 billion Cdn), which was based on 2004 prices and did not take into account inflation through 2012, Sports Minister Richard Caborn said during a debate.

Olympics
Olympics

Opposition MPs were upset with Caborn's report, and Liberal Democrat spokesman Vince Cable said it showed "total chaos" at the heart of the project.

"How they got into such a complete muddle about an important part of the costing of the Games, why they got this so wrong, is a mystery," he said.

Call for more sponsorship

But a representative for the London Olympic Organizing Committee (LOCOG), which is responsible for putting on the Games, said it had always known the original estimate of 1.5 billion pounds (about $3.13 billion Cdn) would go up once inflation was taken into account.

"We budgeted two billion pounds for the staging costs, but the International Olympic Committee asked all candidates to put figures in the year they bid [which was 2004]," said communications director Jackie Brock-Doyle.

LOCOG, led by former Olympian Sebastian Coe, said in January that the estimated price for 2012 would rise to two billion pounds.

Despite the increased costs for running the Games, additional sponsorship would not be needed to offset the 500 million pounds.  Instead, the funds would be raised through ticket sales, broadcasting and marketing rights.

The current shortfall will not be taken from the separate 2.375-billion-pound ($4.96 billion Cdn) budget to build infrastructure and facilities.

The government said it would review the new estimated costs and report back to opposition MPs when it was completed.