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The probability study is a detailed and complex one which has only recently been concluded.

According to sources I have spoken to, this is part of a rigorous update on the budget, which a project of this size and complexity merits.

The study was part of a project-by-project analysis of the Olympics, a bottom-up look at the entire costs for London 2012.

The details of the study were discussed at last week's meeting of the Olympic Board, the body that brings together all the various stakeholders involved in the Olympics project. This includes the government, the , Ken Livingstone, and the .

However, the chance of an increase is admittedly slim. When I spoke to the it admitted that such a study exists and told me that the Olympic Delivery Authority (ODA) had carried out a probability assessment - the sort of industry standard check done for any major project.

It said there was an 80% chance that it would only need to use about £1bn of the additional contingency outlined in the March statement - so leaving the ODA with about £7bn available to spend.

"Taking into account the funding for security and for other non-construction costs (£1.2bn), this means that the probability assessment suggests an 80% chance of a total of £8.3bn being sufficient and not being exceeded," it said.

"The remaining £1bn of contingency is our cover against this happening. We are confident that the funding package is robust and will cover the infrastructure for the Games and the legacy we are leaving for generations to come.

"No-one could give a 100% guarantee - recognising the possibility that risks will appear that we cannot plan for at this stage."

Indeed, when I questioned a government source about whether the £9.3bn overall budget for the Olympics would go up, he said it could.

The government has done a lot of analysis and as John Armitt (chairman of the Olympic Development Authority) and Jonathan Stephens (the Permanent Secretary of DCMS) have said, the government could not be certain where the budget would end up.

Indeed the government, said one source, could not give guarantees that the Olympics would come in on budget. But as a result of the probability study it had confidence it would.

That sums up the government's dilemma on this project. The very fact that the study was undertaken indicates that the it recognises the high-risk factor and the need to make sure the contingency is adequate and costs will not rise.

Industry sources have told me that such a view is hardly surprising. The 2012 Olympics is still more than four-and-a-half years away. Many of the designs for the venues that will form part of the Olympic Park are yet to be agreed and by the time construction starts material costs and labour could rise.

There is also one other factor in this unique project. The Olympics cannot be moved and the start of London 2012 cannot be changed.

The story of the budget so far shows how figures can change as events change.

Back when London made its bid and costed the project in its bid book the public sector funding package was given as £2.375bn.

In February of this year, I revealed that that figure had gone up more than four times to £9.3bn.

This was confirmed when the budget was announced by Olympic minister Tessa Jowell in March.

The increase was due to costs for regeneration of that part of London, costed at £1.7bn, higher security costs, a VAT charge and a contingency on the entire project of £2.7bn.

That figure was insisted on by the Treasury which felt that there should be a 60% contingency for cost overruns.

In recent weeks there has been much speculation that the budget will have to rise and that the entire contingency will be used up.

The probability study was undertaken to provide reassurance but it also raises questions.

Not that budget costs are the only things under scrutiny. Also under scrutiny are the Olympic venues.

Several sports which were meant to be staged in a couple of temporary venues in the Olympic Park may now be moved either to the in Docklands or the the (formerly known as the Millennium Dome) in order to cut costs.

I understand that the Olympic authorities are discussing moving , , and .

However, this has to be agreed by the international federations of these sports and also the International Olympic Committee and this is unlikely before March.

Tessa Jowell's statement to the House did not mention Olympic venues but provided more details on how the budget is made up. The £9.3bn budget of March has now in effect become two budgets.

There is the budget for the Olympic Delivery Authority, which is what the statement concentrated on, providing budget details for venues of £1.17bn, other Olympic Parkwide projects of £868m,transport of £897m, £492m on media facilities and Olympic Village and £647m on program delivery.

What has been stripped off this budget are non-ODA costs, a large part of which is security.

This is now budgeted for £838m. This relates to wider policing and security costs and is the responsibility of the Home Office.

However, the ODA budget does have Olympic park security costs of £354m.

This means the total security budget for the Games is now nearly £1.2bn, almost double the security figure of £600m given in the £9.3bn budget in March.

Given that bombs went off in London the day after the city won the Games it is clearly impossible to say how much this security bill might be at the end of the day.

With four years still to go before the Olympics, the government has a real job on its hands to ensure the budget it announced in March 2007 will be the final figure come July 2012.