NEW council tax rises may be needed to fund the 2012 Olympics and its aftermath, it has emerged.

A leaked report and parliamentary answers suggest that not only will households in London be affected, but also taxpayers in the surrounding counties, including Essex and Hertfordshire.

Ken Livingstone, the London mayor, has promised that the financial burden of the Olympics will be limited to a maximum of £20 a year per household in London.

However, the documents reveal that ministers could take advantage of obscure powers to help to fund the Games and any extra debts they run up, potentially for decades to come.

Local taxpayers in Montreal took 30 years to pay off the debts that the Canadian city ran up from the 1976 Games. There were also cost overruns for the Athens and Sydney Olympics.

The Tories warn that an obscure regional quango could be used to bear some of the long-term liabilities from the Games. The Lee Valley Regional Park Authority (LVRPA) already owns some of the Olympic park land and, as it is funded from the council tax base of Essex, Hertfordshire and London boroughs through an annual levy, there could be knock-on effects for taxpayers, they claim.

A private and confidential report from Deloitte, the auditor, on the possible implications of the Olympic “legacy” for the LVRPA says “substantial increases would probably be needed in capacity and the necessary resources to fund it”.

Answers to parliamentary questions reveal that ministers have instructed officials to begin talks with the LVRPA, including about “liabilities arising from London 2012”.

London boroughs have already expressed concern that managing the Olympic venues after the Games could have an effect on council finances.

Eric Pickles, shadow local government minister, said: “I fear that the Trojan horse of the Lee Valley authority could be used as cover for yet another stealth rise in council tax by Labour.”

The Department for Culture, Media and Sport said: “There is no way in which any 2012-related cost overruns could be the responsibility of the park authority. We have a robust budget for 2012 that will guard against cost overruns.”

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