4:31pm UK, Sunday December 22, 2002

Britain's bid to host the 2012 Olympics still hangs in the balance, the Government has insisted.

180 olympic torch

Sydney games were very successful

The Observer newspaper claimed on Sunday that ministers were planning to scrap proposals to the host the games in London.

It reported that the Government was anxious the project would draw negative publicity, like the Millennium Dome fiasco.

And civil servants were concerned about the spiralling cost of hosting the championship.

Expense

The original bill was put at £1.8bn - but that has soared to £5.4bn.

But Downing Street today insisted no final decision had been made.

A spokesman said: "The Prime Minister has not expressed the views attributed to him in The Observer.

"There is a rigorous process of assessment in place. It is wrong to say that a decision has been taken.

Support

"We are not going to pre-empt that decision and it is important to take time to think things through properly."

The Cabinet is due to consider its position when Parliament returns after the Christmas break.

It has widespread support from the likes of London Mayor Ken Livingstone, the Tories, the Liberal Democrats and London Labour MPs.