Olympic StadiumThe controversial deal to hand the Olympic Stadium in Stratford to West Ham United FC after the games are over has collapsed. BBC London is reporting that the Olympic Park Legacy Company has ended negotiations because of growing concerns about the impact of legal challenges from Tottenham Hotspur and Leyton Orient. The stadium will now remain in public ownership and be rented out to an anchor tenant.

An official statement is expected at lunchtime but according to the BBC it was the uncertainty over the legal challenges that has made the OPLC take its decision. An anonymous complaint to the European Commission over public subsidy also seems to have been a factor. The body has set a deadline of 2014 for new tenants to move in to the stadium, which means planning permission needs to be in by March 2012.

World Athletics Championship

London's bid to host the 2017 World Athletics Championships is also thought to be a factor. Inspectors from the International Amateur Athletics Federation (IAAF) visited London last week and conversation was dominated by the uncertainty over the stadium's future. London faces strong competition from Doha and wants to send a strong message that it is committed to staging the event at the stadium.

A new tender process is now to be opened to find an anchor tenant for the stadium who will lease it for an annual rent. Speculation is that that figure would be in the region of £2m a year. West Ham has already said it would bid to become the anchor tenant in "an amazing year-round home for football, athletics and community events".

The latest twist in a tortuous tale comes just 10 months before the games will begin. Ahead of the official statement, here are some questions that will be requiring answers.

  • With the stadium costing £5m a year to run, and the anchor tenant contributing perhaps £2m a year, who will make up the difference?
  • How can the Government justify setting aside a further £50m of public money to convert a stadium which has already cost over £500m?
  • What financial gain will the anchor tenant be able to get from the stadium, and how does this stack up against the cost to the public?
  • Can a stadium with an anchor tenant really be used to stage a variety of international sporting events?
  • Will a stadium with an athletics track around the pitch be welcomed by football fans?
  • Is it a sensible business move for a football club to play at a stadium it does not own?
  • How much public money has been spent on the legal costs of defending what looks to have been a fundamentally flawed decision?
  • Were the legal challenges that have been mounted really so unexpected in the circumstances?
  • Is it time to look again at how the original decisions on building the stadium were taken and hold the relevant people to account?

They are just some of the many questions arising from what looks like serial bungling by a number of public and private concerns. Legacy was central to London winning the bid, but it's the failure to deliver on that key promise that is central to the mess.

Athletics would never have been able to sustain a stadium of this size on its own, and the failure to confront that from the start has racked up the cost of a public subsidy that was always going to be needed. And the decision not install retractable seating over the running track to cut costs looks very short-term indeed.

Where we are now is that a publicly-funded and owned asset is no longer going to be sold off cheap to a private business. Instead, a private business will pay a rent that doesn't cover the running costs of a stadium that will struggle to keep a conflicting set of masters happy. That's some legacy.