The political row over the cost of the 2012 Olympic Games increased yesterday, when Ken Livingstone attacked Tessa Jowell for “alarming” council taxpayers.

The Mayor of London criticised the Culture Secretary for admitting to a £900 million overspend on the Olympic park before final figures had been settled.

Ms Jowell has conceded that costs for building the park had jumped from £2.375 billion to £3.3 billion. She blamed the increase on rising costs of steel, transport and construction inflation, plus a £400 million bill for managing the project. She maintained that the difference would be met by the national lottery or London council taxpayers, who are already paying an average £20 a year on the Games.

But Mr Livingstone insisted that everything was going “exactly according to plan”.

He admitted that the cost of cleaning, developing and providing the infrastructure for 40,000 homes on the site surrounding the Games could add £1.5 billion. But he insisted that all extra money would be recouped and that the Games, now estimated to cost more than £7 billion overall, would make a profit.

Mr Livingstone said on LBC radio: “What Tessa did, I think she made a mistake. We will have completely reworked the budget in the spring.” He promised to spell out the changes then. “I don’t think people will find that alarming.” He said her mistake was being drawn by a committee of MPs to admit rising costs without counterbalancing that with costs that had fallen.

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