Tessa Jowell and Ken Livingston insist Olympic Park land will be sold for 拢1.8bn after the games, despite bleak property market forecasts

The government has denies claims that Britain faces a 拢1bn black hole after the 2012 Olympics because of 鈥渓udicrous鈥� property price projections.

Tessa Jowell and Ken Livingstone have said they will be able to make 拢1.8bn through the sale of land at the Olympic Park after the games.

But a report in The Times said this figure, which is based on a 16% per annum increase in land prices over the next 15-20 years, is overly optimistic.

It said a report from the London Development Agency showed just 拢800m would be raised if prices rose by 6%. Some agents have said the increase may only be around 4-5% in light of bleak forecasts for the property market.

The Department for Culture, Media and Sport (DCMS) refused to admit it had overestimated potential sales.

A spokesman said: 鈥淭here is absolutely no black hole in the 2012 finances, and these claims are completely misleading and a distortion of the facts.鈥�

Neale Coleman, the Mayor of London鈥檚 director of business, planning and regeneration, also hit out against the reports, calling them 鈥渋naccurate鈥�.

Speaking at a Culture, Media and Sport select committee meeting today he told MPs the 拢800m figure was 鈥渧ery, very cautious鈥�.

He said: 鈥淭he LDA has suggested a range from 拢800m to 拢3bn. If land values increase in the next 20 years as they have over the last 20 years, we will generate not 拢1.8bn but 拢3bn.

鈥溌�1.8bn is not an unrealistic figure. I would anticipate this will be met and exceeded.鈥�

Coleman added that the estimates concerned had been made before the government decision to provide funding for Crossrail, a commitment he said would have a 鈥渕ajor effect鈥� on increasing land values in the area.

But Nigel Evans MP expressed frustration that the projections for land sales were so vague.

He said: 鈥淣one of us round the table will be here in 20 years time to say whether you are right or wrong. When we started the overall budget was 拢2.8bn, now it is approaching 拢10bn. You can see why we are so keen to get as exact figures as we can from the different bodies.鈥�

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