From BBC News
The British Government has given the green light to London's bid to host the 2012 Olympic Games.
Details of the British Olympic Association's bid were presented to Prime Minister Tony Blair and his Cabinet in Downing Street on Thursday.
Culture Media and Sport Secretary Tessa Jowell made the formal announcement to the House of Commons on Thursday afternoon.
The £2.375bn cost of staging the games will be paid for by a new Olympic lottery game, London council tax payers and a contribution from the London Development Agency.
Several other cities have already expressed their interest - New York, Madrid and Moscow are in the running.
But the biggest challenge to London's hopes could come from Paris, where an announcement of a bid is expected in June.
All final applications must be made to the International Olympic Committee (IOC) by 15 July.
London's Olympic bid:
The IOC will make its final decision on who should host the spectacle in 2005.
London would need a new stadium and Olympic village, sited in the east of the city, and transport links would also have to be upgraded.
Tessa Jowell said the £2.375bn cost of staging the games will be met by
£875m raised by increasing London Band D council tax bills by £20
£250m from the London Development Agency
£1.5bn from a new Olympic lottery game and form existing lottery funds
The campaign to pursuade the IOC will cost £500m, whether London is awarded the games or not.
BOOST FOR LONDON'S EAST END
An Olympic bid for London would provide a fitting backdrop for the games but more importantly it will provide much needed regeneration for some of England's most deprived areas.
If the international Olympic Committee decides to hand the city the chance to hold the 2012 event, then an 80,000-seater stadium will be built in Stratford in Newham, east London, on a former industrial site.
It is hoped that it will provide at least 9,000 new jobs and 4,000 new homes for an area which has an unemployment rate of 11.7%
This compares to national average of 5.1%.
The Olympic village, which will house up to 17,000 athletes, coaches and officials, would probably be built in Hackney and there are hopes that it will be converted for use as low cost housing.
The borough which has been plagued by gun crime has one of the highest crime rates and an unemployment rate of 12.2%
Council leaders in nearby Tower Hamlets and Waltham Forest also hope to take advantage of the influx of tourism attracted by the Games.
Newham's mayor Sir Robin Wales said: "An Olympic bid could provide a huge boost to the regeneration of Newham and we will be working hard to maximise the opportunities for local people.
"Our ambition is for the 2012 Olympic Games to be remembered not just for providing a spectacular, world-class sporting festival but also for bringing long-lasting benefits to the people of East London."
But Hackney's mayor Jules Pipe was more cautious.
"Hackney would only benefit if appropriate infrastructure was in place. At present this is not the case.
"It is vital for there to be a Tube link from central London to Hackney.
"We need to look beyond the Olympic Games to focus on delivering the regeneration that the borough needs and ensuring facilities built for the Olympics will contribute to this.
"Only then would such a scheme lead to a lasting regenerative legacy for Hackney."
David Vail, from Clapton in Hackney, said: "Hackney has very high unemployment.
Local people have given a mixed reaction to the possible bid.
"The Hackney Wick site, which is earmarked for use in the Olympics, has plans in train for high density employment.
"These will be scuppered by the Olympic bid.
"Hackney desperately needs jobs and, in the best case scenario, the Olympics would stop a lot of investment for a number of years until it is clear that the bid is unsuccessful.
"Taken with the absence of guarantees about protecting the environmentally sensitive Lea Valley the Olympics is a disaster for the East End."
One woman who lives in East Ham, Newham, told BBC London: "To me the Olympics will gloss over all the problems of the area, the unemployment, the crime and the poor hospitals.
"And what happens to the residents of when the Olympics have gone? We will be forgotten like we always have been."
But Phill from Croydon, south London, said: "It would be a great international sporting occasion and would act as a catalyst to regenerate a poor part of east London.
"It will be a battle between London and Paris, and if we go for it, it might persuade the government to finally back Crossrail."
Key to the success of the project is transport links.
Mayor Ken Livingstone is understood to be seeking funding for extensions to the London Underground to help get the expected hundreds of thousands of spectators to venues and around London.
The biggest benefit could be the official go-ahead for Crossrail - the £15bn rail link from Paddington in the west to Liverpool Street (and possibly beyond) in the east.
Transport Secretary Alistair Darling is still unwilling to commit the government completely to the scheme which would connect existing mainline services and which Labour MPs in the East End are crying out for.
The British Olympic Association is worried that the two projects - Crossrail and the Games - would become too closely linked and have insisted that their bid can go ahead without Crossrail, which is unlikely to be completed before 2011.
Lets Hope the Olympics will come to the UK in 2012