About £350m of £500m construction safety net is earmarked for projects already under way

More than two-thirds of the contingency budget for the construction of the 2012 Olympics has already been earmarked for spending.

The Olympic Delivery Authority is understood to have set aside £500m of its £5.3bn construction budget in case of overruns. But it has emerged that about £350m of this money has, in effect, already been spent on projects that are under way, albeit at an early stage.

A source close to the Olympic construction programme said: “These are costs that have already been identified on venues and infrastructure.”

This means that the construction spend will almost certainly eat into the separate £2.7bn contingency fund announced by the Treasury two weeks ago as part of the overall £9.3bn Olympic budget.

The source said it would require additional support from the Treasury’s fund “sooner rather than later”.

The £2.7bn figure was calculated as a percentage of the entire programme costs, based on the cost of previous large projects, including the Channel Tunnel Rail Link and other countries’ Olympics.

There is no specific agreement in place with the Treasury on how the contingency might be spent, or how and when the ODA will be eligible to claim funds from it.

The source said: “The task was to get the budget over the line. The Treasury wanted a top figure on what the overspend could be.”

The fact that the cost increases have come to light before construction work on venues has started gives an insight into the rate of expenditure and cost increases that the project faces.

The ODA is still working on a final design for the £400m main Olympic stadium with contractor Sir Robert McAlpine and architect HOK. It is understood that designs have been scaled back to keep costs down. The stadium is unlikely to include a roof structure as a result.

A spokesperson for the ODA said: “This is speculation. We would reiterate the statement by Sir Roy McNulty [the acting ODA chairman] that we have a realistic budget and prudent contingency and we are confident that we’ll come within that.”

n At the end of last week the ODA submitted a planning application for sailing facilities in the Dorset towns of Weymouth and Portland, which will be used during the 2012 Games.