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Olympics programme manager CLM will be paid £400m to ensure the 2012 scheme is delivered to time and budget, it was revealed today.

Culture secretary Tessa Jowell confirmed today the payment would contribute to a £900m overall addition to the Olympics budget to a total of £3.3bn. This sum does not include a revised security bill or regeneration costs, she added.

Speaking at the House of Commons culture, media and sport committee Jowell said the other extra costs were down to a doubling in the price of steel and revising transport costs to account for inflation from now to 2012.

Ms Jowell, who said the games would leave a legacy "for ever" in east London, told MPs an unexpected VAT bill for building costs was unlikely to add to the overall cost to taxpayers of the games. She said a newspaper report that the International Olympic Committee (IOC) was to investigate London's soaring costs was "untrue".

"This project is under control. Cost control is a daily part of the rigour. Locog (the London Organising Committee for the Olympic Games) are confident that they are going to raise their sponsorship target," she said.

"The IOC commission has said we have hit every milestone to date. They know that we are further ahead than any other Olympic city at this stage."