Culture secretary Tessa Jowell has told MPs that the budget for the 2012 London Olympics has risen to £9.35bn.

The revised budget is nearly four times the £2.4bn estimate when London was selected to host the Games in 2005.

Construction costs are now estimated at £5.3bn, while a £2.7bn "contingency fund" has also been added. Jowell also said that there will be an £840m tax bill and a further £600m will be added to enable heightened security during the games.

Jowell attempted to pre-empt criticism from both the opposition parties and the public by saying that the economic boost from the Games would counterbalance the extra expenditure.

"London 2012 will bring huge financial gain to the whole country," she said.

The announcement confirms the lingering doubts that the budget was spiralling out of control – as first suggested by the former chair of the Olympic Delivery Authority (ODA), Jack Lemley, who resigned from his post in November 2006. At the time, Lemley had cited “politics and the budget” as the reason for his resignation.

Liberal democrat shadow culture secretary Don Foster hoped the announcement would draw a line under the ‘internal squabbling’ over the matter which has undermined the future of the Games.

"Far from working together, the last year has been characterised by chaos, confusion and infighting of epic proportions.

"Today’s statement must put an end to the type of government bickering that is damaging confidence in the Games.

"The 2012 Games have strong public support and the potential to deliver a lasting legacy to the economy, sport and communities across the country.”

To foot the bill, the government has increased its commitment to £6bn, while an extra £675 million of Lottery money has been earmarked for the project. The majority of the remainder – around £300m – will be provided by London council tax payers.