A £5.5m rescue package provided by Sport England for the National Athletics Stadium at Crystal Palace has finally been agreed – preventing an embarrassing cancellation of July’s prestigious athletics grand prix.

The home of British athletics was supposed to return to the control of Bromley Council in March, but the council repeatedly warned it wouldn’t have the funds to run it.

The council maintained that, as a national facility, Crystal Palace should be funded nationally and the council threatened to close it if no deal to find finances was agreed.

Closure of the stadium and its surrounding facilities would have forced UK Athletics to move the British grand prix to an alternative venue outside the capital – delivering a severe blow to London’s chances of hosting the 2012 Olympic games.

The Sport England deal will guarantee Crystal Palace’s future for the next two years and immediate work with an expected cost of £1.5m will now begin on the 41-year old stadium, which will be completed in time for the grand prix meeting on 30 July.

The 16,000-seat Crystal Palace stadium and its sports centre is the home to London’s only Olympic sized, 50m pool.

The facility is built on the site of the old Crystal Palace football stadium – host to a number of early FA Cup finals.

Athletics began at the site in 1964 when a running track was introduced to the existing facilities. Details: www.crystalpalace.leisureconnection.co.uk