Gordon Brown has come under attack for the spiralling Olympic costs. The Chancellor is accused of approving an open-ended budget for the 2012 games and faces criticism over his VAT rules by the Liberal Democrats by the Liberal Democrats.

The intervention follows culture secretary Tessa Jowels admission last week that the estimated cost of constructing the Olympic facilities has risen from £2.4bn to £3.3bn.

Lib Dems treasury spokesman Vince Cable said: "Ministers have said there would be favourable tax treatment for the Games but no one appears to have realised that this had major implications for the VAT status of the Olympic delivery vehicle.

"Hundreds of million of pounds of taxpayers money is at stake. I am pressing for a clear explanation of precisely what role the treasury and HM revenue and customs have played."

The Conservative MEP for London, Syed Kamall commented: "Many London taxpayers and lottery players want to know exactly how much they will pay.