The problem of securing funding for the £1.2 billion Olympic Village has been worsened by the market turmoil over the past week, the Olympic Delivery Authority's chairman John Armitt admitted.
He confirmed that securing any form of private sector loan is very difficult in current market conditions.
'The reality is that the situation is changing by the day. There was a certain amount of finance available six months ago, less two months ago and the reality is there is even less now. Getting any form of loan from the private sector at the moment is very difficult,' he said.
It is a worrying time for the project. Last month the ODA agreed an interim deal with Lend Lease on the village, enabling the firm to act as contractor without an equity stake for an interim period until a final funding agreement can be reached, which would see Lend Lease part fund the project.
However, the tightening of the financial markets and reluctance to lend, particularly to the property sector, has thrown doubt over Lend Lease's ability to finance the scheme.
Much of London's Olympic budget was built on the assumption that the city would be able to sell off many of the assets after the Games, including the athlete's village, and thereby recoup its capital costs.
Unfortunately this was based on the assumption that property values would continue to rise at a rate of 6% a year. Instead, UK property values have plummeted more than 10% in the past year alone.
Armitt said that the ODA was still forecasting a deal 'around the end of the year', but added: 'It's very difficult in the current market.'
The ODA's chairman said that the organisation believed it currently had 'more than half' of the necessary funding secured for the project. 'We are in discussions with Lend Lease and its banks, and we are in discussions with government,' he added.
Construction on the site is due to begin next year.