The proposed £1 billion 2012 Olympic Village in London is set to be offered support by the Olympic Delivery Authority (ODA) with a government backed guarantee to banks that are willing to help fund the scheme.

Lend Lease, an Australian property developer’s who were to fund the construction of the village in return for being able to keep the profits from apartment sales after the Olympics, were unable to secure bank loans due to the credit crunch.

The Olympic Delivery Authority hope to provide government assurances that loan’s will be repaid, should Lend Lease not be in a position to do so. One source said, “That’s the way its going. The ODA is aiming to have new heads of terms agreement with Lend Lease in place by the end of July.”

The ODA is thought to be having to draw on some of the £2 billion contingency funding set aside to help with supporting the scheme.