Mayor of London Sadiq Khan has accused his predecessor Boris Johnson of "panicking" over the London Stadium transformation, and has taken control of the project - West Ham United's home ground - "to put it on a more secure financial footing".
Khan today published an independent review into the mismanagement of the London Stadium by the former mayor.
Newham Council has "retired" from its co-ownership of the former Olympic stadium, and said it accepts its original £40m investment will not be repaid.
Khan said the review reveals "a catalogue of errors that led to transformation costs soaring and a bungled decision that has left the taxpayer to foot an annual loss of around £20m".
According to the mayor's office, the review by forensic accountants Moore Stephens commissioned by Khan in March this year "reveals for the first time how decisions made by Boris Johnson led to the taxpayer shouldering the cost and financial risk – rather than West Ham United – for the transformation of the London Stadium following the 2012 Olympic and Paralympic Games".
The review also shows the decisions to transform the stadium and to accept the terms of West Ham’s second bid as anchor tenants were made based on incorrect financial estimates and a failure to fully understand or investigate the commercial risks to the taxpayer, the mayor's office said.
"I ordered the review into the finances of the London Stadium to understand how key decisions were made about its transformation and why costs were allowed to spiral out of control. What has been presented is simply staggering. Not for the first time, it reveals a bungled decision-making process that has the previous mayor’s fingerprints all over it," Khan said.
"Boris Johnson clearly panicked when faced with legal challenges about West Ham and Newham’s joint bid to take ownership of the Stadium and then decided to re-run the bid process with the taxpayer taking all the risks and footing almost the whole bill.
"You simply couldn’t make it up. The fact he also failed to properly examine the transformation costs or the entirely inadequate estimates for moving the retractable seats leaves us squarely in the dire financial situation we are in.
"I am determined to put the London Stadium towards a stronger financial footing and secure its long-term future, but I’m under no illusion that this is going to take time and some real commitment from all partners to make this work."
Merryck Lowe, partner at Moore Stephens, said: "Moore Stephens is delighted to have had the opportunity to work on behalf of the mayor of London to provide London’s citizens with an insight into the costs and work involved in transforming the Olympic Stadium.
"We believe our report will assist transparency, enabling everyone taking an interest in the Stadium to understand its history and challenges. I look forward to answering any questions which the London Assembly may raise later this month."