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Ken Livingstone insisted that plans for the London Olympics remained on course despite a rash of headlines saying costs could eventually soar to 10 billion pounds ($19 billion).

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Sports minister Tessa Jowell blamed higher steel prices and transport costs on Tuesday for a rise to 3.3 billion pounds in the predicted cost of building the Olympic Park, which will include the main Olympic stadium, other sports facilities and a media centre, in east London.

That is 900 million pounds higher than the estimate given in London's bid to host the Games.

The estimate excludes what are expected to be billions of pounds for regeneration of a dilapidated area of east London, higher security costs following the July 2005 London bombings and a tax bill that was not budgeted for.

But Livingstone remained optimistic.

"I will make a prediction to you now ... that these Games will make a profit. We have taken the most run-down and polluted place in southern England. On the back of the Games, we are going to regenerate it. It will be a vibrant new area," he said.

Up to 40,000 homes would be built and around 50,000 jobs created, producing "tax revenues on a grand scale," he said.

British media have voiced increasing concern over the escalating cost of the London Olympics after Jack Lemley resigned last month as chairman of the body responsible for creating the infrastructure for the event.

Lemley told a U.S. newspaper the slow progress of the project and concerns over budgets were behind his decision.

Britain has a history of delays and cost overruns for major projects such as the Millennium Dome, the centrepiece of Britain's millennial celebrations, and the new Wembley stadium.

Jowell said on Tuesday that London was years ahead of where the last two cities to host the summer Games, Sydney and Athens, had been at a similar point.

Neither Jowell nor Livingstone would say how the cost increase will be paid for. The original agreement called for London taxpayers and the national lottery to foot most of the bill for the Olympic Park.

The government has also pledged to contribute just over one billion pounds to regenerate the area around the Olympic Park.

Livingstone said he was urging the government to agree to spend another 1.5 billion pounds to put in the infrastructure needed to build the new homes in the 20 years after the Games.

The mayor said he was in a "big row" with the government over the size of a contingency fund that would be added in to the Olympic budget to cover further unforeseen costs.

Livingstone favours a 20 percent contingency fund whereas the Treasury wants a fund of 60 percent.

"I think that's like saying to people: 'You go ahead and waste money and overspend. We've got a big contingency'," he said.