The final episode of The Games, a popular Australian television satire on the lead-up to the 2000 Summer Olympics, featured the lily-livered organisers jetting out of Sydney while the going was good. The hapless fictional organising committee, exemplified by the last-minute flight from inevitable catastrophe, was viewed as a reflection of the country's anxieties about its place in the world. Would this relatively small nation with big ambitions fall at the barrier or rise to the dais?

Would billions of television viewers cringe or crackle with applause when the Olympic rings were formed by the idiosyncratic “lawnmower ballet” in the opening ceremony? Would it all descend into a traffic and public transport morass in the mould of Atlanta '96?

By the close, all fears had dissolved as the city pulled off what is widely regarded as the most successfully managed Summer Games. No small thanks to comic relief provided by the unofficial mascot Fatso - a laconic, overweight wombat with pants around the ankles, who raised the ire of officials by eclipsing the popularity of Syd, Ollie and Millie.

Bill Bryson, the travel writer, noted, apparently without irony: “I don't wish in my giddiness to overstate matters, but I invite you to suggest a more successful event anywhere in the peace-time history of mankind.”

Eight years on, it is the morning after the night before. From the heights of hindsight, participants and observers say that the sober reality is that Sydney set no records for legacy planning. Nor are there any medals to be handed out for economic benefits. The Olympics was touted as the flame that would cast fresh light on the city and lure planeload after planeload of curious foreigners Down Under. Sydney's recognition soared and the tourists flocked, but the effect was a one-off.

In the three years after the Games foreign tourism to New South Wales rose less than for Australia as a whole, the Centre of Policy Studies at Monash University in Melbourne said. There was no debt legacy, but neither was there a multibillion-dollar windfall forecast by its political cheerleaders. The state's auditor-general says that the financial result was a net cost to the public finances of at least A$1.5billion (about £720million).

Cut another way, the Monash researchers say that the redirection of public money into relatively unproductive infrastructure such as equestrian centres and man-made rapids has since cut A$2.1billion from public consumption. Saul Eslake, a leading economist, said that winning the right to stage the Olympics heightened a sense of arrogance and complacency among leading politicians in Australia's most populous state.

“I think that the Olympics didn't have the follow-on impact for either tourism or economic development for Sydney or Australia as a whole that its boosters said it would beforehand,” Eslake said. “Indeed, in some ways Sydney and New South Wales assumed that because they had the Olympics they really didn't need to do anything else. They tended to assume that because they were Sydney, and Sydney had a nice harbour, now Sydney had the Olympics they didn't need to do anything else to attract business or people. They used to publicly say, 'We don't want people to move here.'”

The success of the Games has fathered other successes. The right to host the 2008 World Youth Day Catholic festival - held this month - was won on the reputation for big-event management that Sydney secured in 2000. Similarly, the legacy of a world-class 80,000-seat stadium helped Sydney to attract the 2003 rugby union World Cup final. Many of the other facilities are used for elite and community sport and recreation.

Sue Holliday, the chief planner of New South Wales during the 2000 Games, said, however, that the Olympics should be a “catalyst for changing the map of a city” and that Sydney's legacy is feeble. “We didn't do too well in Sydney,” Holliday said. “At the time of the Olympics everyone gets so caught up with the Olympics and the immediate infrastructure needed for that particular event that really the opportunity to think ‘how is this going to change the whole region?' gets missed very quickly and very easily.”

A lack of political will and funding meant that, apart from the stadiums, the only significant civil infrastructure built for the event was a single dead-end railway line to the site of the Games in Homebush Bay, in the city's west. That 1,580-acre (640-hectare) site at the end of the line also represents a lost opportunity, Holliday said.

Now being developed for residential and commercial use, Sydney Olympic Park was long criticised as a white elephant; a long-term master plan did not appear until 2005. “The master plan is under way, but we're now 2008 and the Olympics was 2000 and we started planning for the Olympics six years before that,” Holliday said. “So we're talking a 15-year time period and the construction of that town centre is under way now. I think it will be successful, but there was a lost opportunity longer term.”

The men and women in green and gold continue to thrive, with a record 17 gold medals in Athens in 2004 topping 16 for the Sydney Games. Athletes training for Beijing continue to benefit from their home Olympics, owing to a A$90million nest egg extracted by the Australian Olympic Committee from the New South Wales Government that has since flourished to A$133million.

But in terms of mass participation - a big justification for public funding of sport - it appears that the Olympic rings did little to encourage Australians to jump through hoops.

Professor Kristine Toohey, a sports academic at Griffith University in Queensland, said that there was no proof of increased participation and one study demonstrated that the Olympics encouraged more people only to watch sport on television.

Toohey said many people had been turned away by poorly resourced clubs and that extra support for these organisations was vital. Australia had also failed effectively to use its stars as recruiters. “I would look at it as payback time,” she said. “They've been supported by Government and if they can be integrated into recruiting for junior sports, it allows them to give back.”

While the Government is easy target practice for many of those who see shortcomings, others say that it has hit the odd bull's-eye. The federal Government's most senior appointee during the Games argues that Australia has undisputedly been better served by its security network since 2000.

Neil Fergus, the chief executive of the security consultancy Intelligent Risks and an adviser to Beijing and London, said that before the 2000 Olympics there had been no SAS presence on the east coast of Australia. This is now permanent. Moreover, general policing capability, upgraded equipment and better co-ordination between services had paid dividends in the aftermath of 9/11 attacks in 2001 and the Apec leaders' meeting last year, he said.

Fergus exemplifies one of Sydney's outstanding successes: the export of Olympics expertise. There are said to be more Australians on the ground in Beijing than any other contingent.

Back home, Sydney appears still to be getting to grips with legacy shortcomings. Hugh McKay, a social commentator, said that the Olympics had provided a fillip to the city's confidence. “It didn't transform Sydney, although it probably did give more Sydneysiders a sense, that had been emerging anyway, that this is a truly international city,” he said.

“Sydneysiders still glow at the recollection of how well it went and how we all felt at the time. But there is this slightly bitter aftertaste that we overdid it on the Olympics and we've been underdoing it ever since.”