Whether cock-up or conspiracy, the latest financial mess to emerge from the London Development Agency vindicates the decision to create a separate 2012 legacy company to own and operate the Olympic Park after the Games.

The £9.3 billion public investment in the project clearly cannot be entrusted to the agency if it cannot master basic accounting practices.

Even the most cynical have largely been won over by the apparent competence of the Olympic Delivery Authority, the agency clearing the site and building the venues. It has won the respect of urban planners, event managers, even environmentalists, and the general consensus is that the park will be delivered on time and budget, despite the recession.

There is even confidence in the ability of the London Olympic organising committee, led by Lord Coe and Paul Deighton, to deliver an efficiently run event in 2012. Host cities tend to go through organising committees faster than Usain Bolt over 100 metres.

Both organisations will cease to exist in 2013 and that is when things get very blurry. The park will become the responsibility of the LDA and, given the evidence of its incompetence, that is a worrying prospect.

A financial hole of up to £100 million is negligent at best even if, as the LDA argues, the forecasting of future spending is a constantly changing calculation. While this liability is distinct from the ring-fenced £9.3 billion public investment in the Olympics and Paralympics, it is indicative of the drain on the public purse if the legacy issue is not addressed.

London taxpayers are already paying £20 a year per household via council tax for the Olympic development in addition to funding from the Exchequer and the National Lottery.

Under the present masterplan for the Olympic park after 2012, more tax receipts would have to be used to prop up the £547 million stadium, which is likely to need an annual subsidy of £800,000.

The concept of a secondary school and national sports skills academy in the undercroft of a scaled-down 25,000-seater athletics stadium has not won widespread acclaim. Critics hope that Baroness Ford and Andrew Altman, who will lead the new 2012 legacy company, can come up with a more commercially viable plan. Taxpayers should breathe a sigh of relief that the task is soon to be taken out of the LDA’s hands.