Livingstone said costs overruns were ``inevitable.''

Olympics Minister Tessa Jowell said Tuesday that infrastructure costs had risen by 900 million pounds (C$1.98 billion) from the amount quoted in the bid.

The final budget hasn't been formulated yet, but some British lawmakers have speculated the total cost could reach more than eight billion pounds ($17.5 billion Cdn).

``It is not Alice In Wonderland,'' Livingstone told BBC Radio. ``Nothing's a mess. Everything's going exactly according to plan. These games will make a profit. We are buying land now, we are doing it up. It will be sold for the construction of housing and employment immediately after the games so this money will come back in.''

The original cost of constructing the main Olympic park in Stratford, a rundown area of east London, was 2.38 billion pounds ($5.2 billion). Jowell said the figure had risen to 3.3 billion pounds ($7.2 billion) because of rising costs in security, steel prices and inflation.

The increases are also linked to expanded regeneration of the area before and after the Games _ things Livingstone said would eventually turn a profit.

``It would be madness to build the Olympic Games, then dig a large part of it up to put in the infrastructure to put that in,'' Livingstone said.

``So we are saying to government, and so far government is up for this, that we should spend another 1.5 billion pounds ($3.3 billion) to put in the infrastructure that allows us to build those 35,000 to 40,000 homes in the 20 years that follows.''

British Prime Minister Tony Blair wasn't surprised by the fuss over the budget.

``We were absolutely right in predicting that if we won the Olympics then everyone would say, `That's absolutely fantastic,' and then you'd have six years of everyone complaining,'' he said. ``In fact we should be thrilled we've won the Olympics. It's a fantastic thing for the country and it will encourage so many young people to take up sport.''

Livingstone said Jowell ``made a mistake'' by announcing the increased costs before the budget was finalized.

``We will have a completely reworked the budget in the spring,'' he told London's LBC Radio in another interview.

Livingstone said all the changes to the reworked budget would be published by early to mid-2007.

``I think people won't find that at all alarming,'' he said.

Jowell didn't say how the extra 900 million pounds would be raised. The original plans called for London taxpayers and a national lottery to contribute to construction costs.

Livingstone said he was ``pretty determined and certain'' that Londoners wouldn't pay more for the games than already budgeted.

Each London household will contribute 38 pence ($0.83) a week for up to 12 years, through a council tax, contributing 625 million pounds ($1.37 billion) to the Games.