Will the Olympics boost London's economy?

As London's bid received its official launch, backers said the Games would revitalise run-down areas, and bring increased investment and tourism.

They said plans to build an 80,000 seat stadium and Olympic village in east London would create 3,000 new jobs.

London would also benefit from upgraded transport links and new hotels.

According to some estimates, the Games would attract up to half a million new visitors every day to the capital.

Cost equation

"I think it's a very exciting time for East London," Gary Beckwith of tourist organisation Tour East London told BBC News 24.

"We think SMEs (small and medium-sized enterprises) are going to flood to the area, and that will bring new jobs."

The Olympics would transform east London

Supporters of London's bid say the capital could follow the example of Barcelona, where extensive refurbishments transformed the city's image when it hosted the 1992 Games.

The costs of staging the Olympics in London are estimated at about �2.4bn, including �730m to buy and develop sites in east London.

The day-to-day operating costs are estimated at a further �780m, while the final bill for putting together the London bid - led by Barbara Cassani, former head of budget airline Go - is thought likely to come in at about �13m.

The costs would be met through a special Olympics lottery, and a one-off �20 surcharge on London residents' council tax.

Historically, the costs of staging major international sporting events have often outweighed the benefits.